Dear All,
Forwarding you the Result Update on HUL for 4QFY2011 with an Accumulate recommendation and a Target Price of ` 306 (12 months).
HUL posted good set of numbers for the quarter, largely in line with our estimates. The top line grew by 13.5% yoy to `4,899cr (`4,316cr). Recurring earnings for the quarter grew by 25.9% yoy, above our estimates. Other key highlights of the results include 1) 11.4% yoy revenue growth in the S&D segment (EBIT margin contracted by 525bp yoy to 7.5%), 2) food business showed 15.4% yoy growth and 3) personal products grew by 16.2% yoy, registering the eighth consecutive quarter of double-digit volume-led growth. We maintain our Accumulate view on the stock.
Double-digit volume growth continues, profitability yet to recover: HUL posted 13.5% yoy top-line growth to `4,899cr (`4,316cr), largely driven by acceleration in volume growth to 14% yoy. Overall FMCG sales grew by 14% yoy, aided by 13.6% yoy growth in home and personal care (HPC) and 15.4% yoy growth in the foods business. At the operating level, OPM contracted by 48bp yoy on account of raw-material price inflation as gross margin contracted by 287bp yoy. In terms of earnings, HUL posted a 25.9% yoy increase to `486cr (`386cr), which was higher than our and street’s expectations.
Outlook and valuation: At the CMP of `284, the stock is trading at 21.3x FY2013E earnings. We maintain our Accumulate view on the stock with a target price of `306 based on 23x FY2013E revised EPS of `13.3.
Kindly click on the following link to view the Report.
If you have any further queries, feel free to call us on 022 39357600, Extn: 6865 or mail us at advisory@angelbroking.com
With best regards,
Fundamental Advisory Desk
Angel Broking
Akruti Star,6th Floor, Road No.7,MIDC, Andheri (E),Mumbai – 93.
Call : (91) (022) 39357600 Ext. 6865
Website : www.angelbroking.com
Disclaimer: Ours is an advisory role. The final decision and consequences based on our information is solely yours. Moreover, in keeping with regulatory guidelines, we do not guarantee any returns on investments. Prospective investors and others are cautioned that any forward-looking statements are not predictions and may be subject to change without notice.
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