Re: {LONGTERMINVESTORS} HUL.....thread
RAJESH DESAI
Unilever Reports Highest Price Growth Since 2009
Unilever reported the highest price growth in more than two years as it introduced products such as Magnum ice cream and Knorr jelly bouillon in new markets and passed on surging input costs.
So-called underlying price growth at the world’s second- biggest maker of consumer goods rose 5.1 percent in the second quarter, the London- and Rotterdam-based company said today. That beat the median estimate of nine analysts surveyed by Bloomberg News for a 2.6 percent increase. Total underlying sales advanced 7.1 percent. Analysts had anticipated growth of 5.8 percent on that basis.
Under Chief Executive Officer Paul Polman, in the job since 2009, the company has pushed new products such as the jelly bouillon into countries including Germany and repackaged the item into sachets in China. He’s also lifted prices again after offering more promotions following the global financial crisis in a bid to combat surging costs for ingredients such as palm oil and sugar.
“Unilever’s first-half results are very strong,” said Harold Thompson, an analyst at Deutsche Bank in London, who recommends investors buy the stock. “In what is clearly a very difficult environment for consumer-goods businesses, this is likely to be a top quartile performance through the results season and represents easily the best performance since Paul Polman was appointed as CEO.”
Unilever shares rose as much as 5.2 percent in Amsterdam trading, the biggest intraday advance since November. The stock was up 4.6 percent, to 23.11 euros a share at 9:41 a.m. The stock has dropped less than 1 percent this year, bringing its market value to about 70 billion euros.
Competitors
Danone (BN), the world’s largest yogurt maker, last week reported first-half profit that missed analysts’ estimates as it wrestled with higher costs for milk and plastic and as volume in Europe declined. Nestle SA, the world’s largest maker of food, reports earnings next week.
Unilever Chief Financial Officer Jean-Marc Huet declined to say whether he felt commodity costs had peaked on a call today with journalists. “The markets themselves we cannot predict; that’s not our business,” he said, adding that the company has a “very good view on where we will land in 2011.”
Beautiful Growth
Underlying sales in Western Europe rose 4.8 percent in the second quarter, the biggest advance in at least two years, boosted by Germany and France.
“Western Europe as a market is a very difficult one,” Huet said. In the second half, volume will “not be growing at huge levels but what we need to do is make sure Europe doesn’t dilute the beautiful growth we have seen elsewhere.”
First-half net income rose 9.8 percent to 2.2 billion euros ($3.2 billion), higher than the 2.06 billion euros anticipated by the average estimate of analysts surveryed by Bloomberg. Total sales rose 4.1 percent to 22.8 billion euros.
Underlying Operating Margin
The underlying operating margin, a measure of profitability, fell by 20 basis points in the first half as the company raised prices and cut advertising and promotional spending compared with the same period last year. The median estimate of nine analysts was for a 50 basis-point decrease. The company said in April it expected commodity costs would amount to between 500 and 550 basis points of revenue this year, up from a February forecast of 400 basis points.
The volume of goods sold rose 1.9 percent, lower than a 3.2 percent estimate. Underlying sales growth excludes the effect of acquisitions, disposals and currency fluctuations.
To contact the reporter on this story: Clementine Fletcher in London cflet...@bloomberg.net.
To contact the editor responsible for this story: Celeste Perri at cpe...@bloomberg.net.
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EQUITY BULL
RAJESH DESAI
research report is attached.
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EQUITY BULL
RAJESH DESAI
Two months after inviting bids to sublease Gulita, HUL is now reportedly contemplating selling the plot on outright basis. With the SC order reducing the transfer fee to 7.5% of the ready reckoner rates prevailing before 2008, HUL, which holds a perpetual lease for the property, now hopes to garner over Rs 300 crore by selling the plot.
"We continue to evaluate all options to realize optimal value from the Gulita property," said an HUL spokesperson. HUL has deferred the decision to finalize a bidder to sublease the plot till December. Of 12 bids received, it shortlisted six, including Sheth, Oberoi, Peninsula Land, Ajay Piramal led Piramal Realties.
"Developers, too, will prefer the sale option. If HUL decides to sell, it will have to reinvite bids to ensure transparency," said a property expert.
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EQUITY BULL
RAJESH DESAI
Consumer goods giant Hindustan Unilever today said it is looking at cornering over 13% of the shampoo market next fiscal with its leading hair care brand Dove in the next fiscal.
"We have already launched these products globally. Today we have launched it in this market. With this we expect to gain 13-15% market share in FY13," HUL General Manager, Hair Care Business, Piyush Jain, told PTI here.
He further said, "the company entered the hair care segment in 2007 and since then we have achieved a market share of 10%."
The shampoo market is estimated to be around Rs 3,500 crore.
To achieve the target, the company today launched its Dove nourishing oil care range of products -- oil care shampoo, daily treatment conditioner, oil care weekly vita-oils repair mask and oil care vita-oil serum -- in the premium category which contains a blend of vita oils including coconut, almond and sunflower oils.
Dove, which initially started as soap brand, has diversified into the hair care and antiperspirant segments recently.
HUL - CAPITAL MARKET view is attached.
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CA. Rajesh Desai
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CA. Rajesh Desai
RAJESH DESAI
A look at the parent co. results.
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CA. Rajesh Desai
RAJESH DESAI
India's largest fast moving consumer goods company Hindustan Unilever is expected to report a robust set of numbers for October-December, helped by staggered price hikes across its categories. The company reports third quarter results on Monday.
FMCG companies have so far reported mixed results for the last quarter. Cigarettes to hotels and FMCG major ITC reported a market beating 22% rise in net profit. However, its volumes in the cigarettes segment disappointed the street.
HUL's smaller rival Marico on Thursday reported strong earnings for the quarter, sending its stock surging. Its net profit was up 21%, and sales rose 29%. Volumes also rose 20%, despite sharp price hikes taken by the company.
HUL too has been raising prices across segments to offset some of the increase in input costs. This will help HUL profits rise 15-18% year-on-year while net sales are also seen going up at a similar rate in the third quarter. Religare Institutional Research has forecast a 23.5% growth in HUL's net profit and 16% sales growth.
"(Expect) continuation of volume growth at 9% year-on-year despite double-digit growth in Q3. With healthy growth in soaps & detergents and personal products, expect revenue growth of 16% YoY to Rs 5,930 crore," Emkay Global Financial Services said.
HUL's advertising and promotion spends in the quarter were also benign and that will help margins, which have been under pressure for some quarter now given intense competition and high input costs.
"We expect HUL's EBITDA margin to expand by 40 bps to 14.5% despite gross margin contraction owing to savings in ad spends and other expenditure," brokerage Motilal Oswal said in its report.
Emkay expects HUL's margins will expand by 55 basis points in the quarter to about 14.7%.
Key points to watch for:
- Volume growth in the quarter, especially given the price hikes it took across segments. Many analysts expect it will maintain a volume growth of high-single digits.
- Margins, especially, in the highly competitive soaps and detergents space.
- Outlook going ahead. Motilal Oswal expects HUL will continue to raise prices in the fourth quarter to pass on the impact of high raw material prices and the rupee depreciation in the third quarter.
- Commentary on growth expectations going ahead. Strong rural appetite for FMCG products has helped most companies boost sales. However, some analysts like Angel Broking's Sreekanth PVS say companies now face a risk of slowdown due to the constant price hikes.
HUL shares closed up 2.7% at Rs 401.40 on NSE on Friday. The stock is up near 18% since September 30, while the wider Nifty index is up about 8% over the same period.
Angel's Sreekanth says most FMCG companies are trading at peak valuations following the rally in the third quarter. He is "underweight" on the FMCG sector and has a "neutral" rating on HUL.
Motilal Oswal too has a "neutral" rating on HUL, while Emkay advises a "hold". Religare has a "buy" on the stock with Rs 425 target price.
Nachiket Kelkar
nachike...@network18online.com
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CA. Rajesh Desai
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CA. Rajesh Desai
RAJESH DESAI
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CA. Rajesh Desai
RAJESH DESAI
HUL: 5 reasons why shares have hit life-time high
Shares in Hindustan Unilever, India's largest consumer goods maker, soared to its life-time high Tuesday on the back of strong June quarter earnings. The stock, which has risen just 9 percent since the start of 2012 compared with a 21 percent rise in the BSE FMCG index, jumped 6 per cent today on the back of strong earnings.At 12.15 p.m., it traded 6 per cent higher at Rs 470 in a flat Mumbai market. It was the top gainer on the 50-share Nifty index. Investors bought HUL despite high valuations. The company trades at 26.5 times its 12-month forward earnings, compared with 15.1 times for ITC Ltd and 21.6 times for Godrej Consumer.
HUL, which the market values at $17.5 billion, makes popular brands such as skin fairness cream Fair and Lovely, Clinic Plus shampoo, and soap brands such as Dove.
Here are the reasons for the strong buying interest seen in the stock.
1) Strong volume growth: The Company reported a 9 per cent jump in volume growth in the June quarter. Indian consumer goods makers face a difficult choice between raising prices and retaining market share as inflation in home, personal care and food segments, as well as weak consumer sentiment pinch margins and price increases hurt volume growth.
"The volume growth has been strong and that is one encouraging number to take with us into a very uncertain time ahead," said Naveen Trivedi, an analyst with PINC Research.
2) Net jumps twofold: Net profit at Hindustan Unilever surged to Rs 1,330 crore in the first fiscal quarter of the year from Rs 630 crore a year earlier, well above the consensus estimates for a Rs 694 crore profit. The higher than expected profit was on account of an exceptional income of Rs 607 crore arising from the sale of properties.
3) Sales in-line with estimates: Net sales for the quarter rose 14 per cent to Rs 6,250 crore.
4) Margins expand: HUL's operating margins in the quarter rose 180 basis points from a year ago, with its operating profit rising 30 percent.
5) Both home and personal care and foods segments registered double digit growth as compared to the same period previous financial year. Sales at the home and personal care segment grew 21 percent, while its foods business grew 11 percent.
Global brokerage firm Morgan Stanley said the results reflected "strong" volume growth and "even stronger pricing".
"Q1 results underscore our view that large consumer companies in India are gaining volume market share at the cost of regional players," Morgan Stanley analysts wrote in a note.
Reuters Market Eye - Hindustan Unilever(HLL.NS) gains 6.2 percent after earlier touching a record high. Gains sparked after India's largest consumer goods maker on Monday beat April-June quarter earnings expectations by a wide margin.
CLSA upgrades its target price on the stock to 485 rupees while retaining its "overweight" rating, calling the earnings "a strong all-around performance" that showed growth across volume, EBITDA, and margins.
Morgan Stanley says the results reflected "strong" volume growth and "even stronger pricing," adds earnings validate its call that large consumer companies are gaining volume market share at the expense of regional players.
IDFC analyst Nikhil Vora issues a more cautionary note, saying the foods business remains a concern, as does Hindustan Unilever's organizational structure.
"Inability to aggressively grow the foods business (Unilever overhang) remains a concern," he writes.
"For the market out performance to continue over a longer period, HUL needs to get 'leaner' in terms of organizational structure as well as extend its footprint to larger and more relevant categories," Vora adds.
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CA. Rajesh Desai
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CA. Rajesh Desai
RAJESH DESAI
NSEI Block Deal: Hindustan UniLever 500000 shares at 466.00 INROn Fri, Jul 27, 2012 at 11:35 AM, Kashyap Tanna <kashya...@gmail.com> wrote:
NSEI Block Deal: Hindustan UniLever 250050 shares at 465.65 INR
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With regards,Kashyap Tanna.
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With regards,Kashyap Tanna.
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CA. Rajesh Desai
Rajesh Desai
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CA. Rajesh Desai
Rajesh Desai
Press Release
RESULTS FOR HUL MARCH QUARTER 2013
13% DOMESTIC CONSUMER SALES GROWTH; PAT (bei) UP 18% IN MARCH QUARTER 2013
Mumbai, April 29th, 2013: Hindustan Unilever Limited announced its results for the quarter and financial year ending 31st March 2013.
March Quarter 2013
During the quarter, the Domestic Consumer business grew at 13% with strong 6% underlying volume growth. Both Home and Personal Care (HPC) and Foods & Beverages (F&B) registered double digit growth.
Soaps and Detergents grew 13%; broad based growth
Skin Cleansing delivered a robust performance with double digit volume growth in Dove, Lux and Lifebuoy. The quarter witnessed price deflation as the benefit of the lower commodity cost was passed on to consumers. The liquids portfolio was further strengthened with the relaunch of the Dove Bodywash range.
Laundry maintained its double digit growth across formats. Surf and Rin continue to drive category upgradation, clocking in another quarter of double digit volume growth. Vim led the solid growth in Household Care.
Personal Products grew 12%; growth accelerates in Hair and Oral Care
In Skin, Ponds and Lakme did particularly well. Ponds Age Miracle sustained its strong growth momentum while Lakme growth was driven by the Perfect Radiance range. Fair & Lovely maintained its strong position albeit in a slowing mass skin lightening segment. The facewash portfolio was further strengthened with two new differentiated offerings – Lakme Nourishing Glow Clean Up and Ponds White Beauty Tan Removal Scrub.
Hair Care had a very good quarter with strong volume led double digit growth. Clinic Plus grew well driven by its relaunch, Sunsilk accelerated through impactful activation and Dove growth was led by a strong performance on bottles. TRESemmé continues to gain consumer franchise while the initial response to the Dove Elixir range of premium hair oils has been very positive.
Oral Care registered volume led double digit growth driven by a further step up in both Close Up and Pepsodent. A range of premium toothbrushes were launched under Pepsodent Expert Protection.
Beverages grew 18%; robust growth across portfolio
Tea delivered another strong performance with double digit growth across all key brands. Actions taken over time to strengthen the core, extend distribution, deploy engaging activation and market development for tea bags has helped step up growth in this category. In Coffee, Bru sustained its growth momentum.
Packaged Foods grew 7%
Kissan Ketchups maintained its double digit growth path while growth accelerated on the Knorr soups portfolio. The initial response to the Soupy Noodles relaunch in the last quarter has been encouraging. Ice Creams grew modestly impacted by a slowdown in the market.
Profit After Tax (bei) up 18%
While commodity costs were relatively benign during the quarter, competitive intensity remained at high levels. We continued to invest behind our brands - A&P was up 144 Crores (+90 bps) in the quarter. Despite this step up, Profit before interest and tax (PBIT) grew by 17% and PBIT margin improved by 60 bps. Profit after tax but before exceptional items, PAT (bei), grew by 18% to Rs. 781 Crores during the quarter. Net Profit at Rs.787 Crores grew 15%.
Financial Year 2012-13
The Domestic Consumer business grew by 16% with 7% underlying volume growth. All segments grew in double digits. Profit before interest and tax (PBIT) grew by 23% with PBIT margin improving 80 bps. Profit after tax but before exceptional items, PAT (bei), grew by 28% to Rs. 3314 Crores with Net Profit at Rs.3797 Crores growing 41%.
The Board of Directors has proposed a final dividend of Rs. 6 per share for the financial year ending 31st March, 2013, subject to the approval of the shareholders at the Annual General Meeting. Together with interim dividend of Rs 4.50 per share and special dividend of Rs 8 per share, the total dividend for the financial year ending 31st March, 2013 amounts to Rs. 18.50 per share.
Harish Manwani, Chairman commented: “In a challenging environment, we have delivered broad based competitive growth and margin improvement. We have continued to invest in strengthening our brands, stepped up innovation and driven in-market execution and operational efficiencies even harder. At the same time, we are making good progress on our Sustainable Living Plan agenda. While there are near term concerns around slowing market growth and inflationary pressures on consumers, we are confident of the medium to long term growth prospects of the FMCG sector and remain focused on delivering consistent and competitive growth with sustainable operating margin improvement.”
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CA. Rajesh Desai
Rajesh Desai
Dear Sir/ Madam,
Unilever PLC along with Unilever N.V. announced an open offer at INR600 per share for acquisition of 22.52% of the share capital of Hindustan unilever to increase its holding from 52.5% to 75%.
Open Offer details
1.1. Size: 487,004,772 Shares representing 22.52% of the Voting Share Capital of the Target Company.
1.2. Price / consideration: INR 600 (Rupees Six Hundred) per Share (the “Open Offer Price”)
1.3. Mode of payment (cash/security): The Open Offer Price will be payable in cash by the Acquirer, in accordance with the provisions of
Regulation 9(1)(a) of the SEBI (SAST) Regulations, 2011.
View:
We have been maintaining our strong buy view on the stock from the level of INR419 from the past 12-15months. Open offer at the price of INR600 by the parent company clearly signal the strong business outlook of Hindustan unilever and Indian FMCG industries. We had stated earlier also that Hindustan Unilever is “waking up after a long sleep” and is now awake and ready to fire on all cylinders. We maintain our price target of INR676 for the Stock.
Regards,
Team Microsec Research
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CA. Rajesh Desai
Rajesh Desai
Hindustan Unilever (HUL) has launched Pureit Marvella RO Slim, a smaller version of its Marvella RO water priced at Rs 10,990 as against Rs 14,990 of the larger version. The company has unveiled it in order to enhance its product offering in the water purifier segment as it looks to strengthen its position in the market.
Pureit products are priced in the range of Rs 990 to Rs 14,990. It is available in three categories -- offline (non-electricity run), ultra violet (UV) and reverse osmosis (RO). HUL exports Pureit products to nine countries, including Brazil and China, from its two plants in Haridwar in Uttarakhand and Daman in Gujarat.
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CA. Rajesh Desai
Rajesh Desai
Reuters Market Eye - Hindustan Unilever (HLL.NS) shares fall 1.2 percent after its parent company Unilever (ULVR.L) (UNc.AS) warned on Monday that a slowdown in its emerging markets accelerated in the third quarter, dealers said.
Unilever expects underlying sales growth of just 3 to 3.5 percent in the period.
CA. Rajesh Desai
Rajesh Desai
Hindustan Unilever - Sharekhan
Recommendation: Reduce
Price target: Rs540
Current market price: Rs589
Margin surprise unsustainable; Reduce maintained
Result highlights
Q2 reported earnings boosted by unexpected firming of margin; unfavourable demand environment and valuation makes us retain our Reduce rating: Hindustan Unilever Ltd (HUL)'s Q2FY2014 results surprised positively with a higher than expected operating profit margin (OPM). The volume growth of 5% and revenues were largely in line with our expectations and were boosted by a double-digit growth in the personal care segment. However, the demand environment remains challenging and the sustainability of the margin is questionable given the lag effect on the raw material cost due to the depreciation of the rupee. We maintain our negative stance on the stock with a Reduce rating and price target of Rs540.
Management commentary-moderation in demand; hedging and low inventory boost to margin: The management in the conference call stated that the sales of discretionary categories are under pressure and the premiumisation trend in some of the key categories has scaled down in the recent past. Despite the rupee depreciating by ~10%, the gross profit margin (GPM) remained higher by above 169 basis points year on year (YoY) due to an efficient hedging mechanism and certain upholding of the low-cost inventory. The personal products segment has witnessed the revenue growth coming back to double digits, which can be attributed to the favourable base effect and higher sales of winter products during the quarter.
Segmental performance shows mixed trend: The commoditised soap and detergents segment registered a volume-led growth of 6% YoY with the profit before interest and tax (PBIT) margin remaining almost flat at 14.0% in Q2FY2014. The personal products segment regained its double-digit growth with the revenues growing by 12% YoY. The improved growth can be attributed to the low base of Q2FY2013 and higher sales of winter products during the quarter. The PBIT margin of the personal products segment declined by 141 basis points YoY to 22.8% during the quarter. The beverages segment continued to post a revenue growth of around mid- to high-teens (16% YoY for Q2FY2014). The lower tea and coffee prices aided the margin of the beverages segment to improve by 264 basis points YoY to 17.0%. The packaged food segment picked up some growth rate with a higher single-digit revenue growth of around 9% YoY. However, the growth in the packaged food segment has remained volatile for the past several quarters.
Maintained Reduce rating on back of cautious outlook and premium valuation: For the past four quarters, HUL's volume growth has been hovering around 5% and we expect the demand environment to remain challenging due to the sustained inflationary pressures hurting the discretionary spends and the intensifying competition in some of the key categories, such as soaps, detergents and oral care. On the other hand, the impact of the rupee's depreciation on the raw material cost, and the need for higher advertisement and promotional spends would put pressure on the margin in the coming quarters.
We have broadly maintained our earning estimates for FY2014 and FY2015. Any significant deceleration in the GPM or drop in the sales volume growth in the coming quarters would act as a risk to our earning estimates. At the current market price, the stock trades at 36.4x its FY2014E and 32.6x its FY2015E. In view of the near term head winds and premium valuation, we maintained our Reduce rating on the stock with the price target of Rs540.
CA. Rajesh Desai