IndiaInfoline
Hindustan Unilever_Annual Report Analysis.pdf
CMP=20 Rs244, SELL
Target=20 price Rs238, Downside 2.5%
HUL= =20 recorded a robust performance during F12/07 driven by strong 14% yoy growth= in=20 the domestic FMCG business. The core HPC segment recorded sharp 12.3% yoy g= rowth=20 led by 9% and 14% increase in personal care and soaps & detergents reve= nues=20 respectively. The company has started focusing on new growth categories lik= e=20 high-end personal care (skin, hair care), foods and water. It has invested= =20 heavily in the water purifier business and expects to complete national rol= lout=20 by F12/08. Heavy onslaught of competition in the core categories from emerg= ing=20 players like ITC, will result in higher adspend. Firm raw material prices w= ill=20 further add pressure on margins going forward.
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While= =20 we remain positive on the business model of the company, we recommend a SEL= L=20 based on expensive valuations with a price target of Rs238 =96 downside of= =20 2.5%.
