Hindustan Unilever Ltd (Q4 FY13)

India Infoline News Service | Mumbai |

HUL Q4 FY13 revenues were almost in line with our expectations (of ~Rs63bn) at Rs63.7bn – up by 12.5% yoy led by 13.1% yoy growth in domestic FMCG business.

CMP Rs498, Target Rs570, Upside 14.6% 
  • Q4 revenues were in line with our expectations at ~Rs64bn, up by 12.5% yoy led by ~13%/15% yoy growth in HPC and foods segment respectively. HUL reported healthy underlying volume growth of 6% yoy
  • Soaps and Detergents segment witnessed 70bps expansion in EBIT margins at 12%. Personal products segment margins, however, contracted by 210bps to 25.8% due to increased A&P investment and slower growth in Fair & Lovely – a key skincare brand
  • Despite sharp rise in advertising cost, OPM expanded by 90bps to 13.7%, aided by softening key input prices. Adjusted net profit registered ~15% yoy increase at Rs7.9bn partly led by higher other income
  • Unilever PLC’ voluntary offer to increase stake in HUL to 75% at Rs600 per share is a fresh trigger for the stock. Recommend Buy rating with a revised 9-mth target price of Rs570 (earlier Rs513)
Result table (Standalone)
(Rs m) Q4 FY13 Q4 FY12 % yoy Q3 FY13 % qoq
Net sales 63,671 56,605 12.5 64,337 (1.0)
Material cost (34,326) (31,223) 9.9 (34,191) 0.4
Personnel cost (3,123) (2,751) 13.5 (3,427) (8.9)
Advertising cost (8,211) (6,773) 21.2 (8,222) (0.1)
Other overheads (9,281) (8,578) 8.2 (9,821) (5.5)
Operating profit 8,731 7,280 19.9 8,677 0.6
OPM (%) 13.7 12.9 85 bps 13.5 23 bps
Depreciation (614) (571) 7.6 (593) 3.6
Interest (60) (2) 2,905.0 (75) (20.2)
Other income 2,045 1,754 16.6 3,549 (42.4)
PBT 10,102 8,461 19.4 11,557 (12.6)
Tax (2,324) (1,876) 23.9 (2,771) (16.1)
Effective tax rate (%) 23.0 22.2 - 24.0 -
Adjusted PAT 7,778 6,585 18.1 8,786 (11.5)
Adj. PAT margin (%) 12.2 11.6 58 bps 13.7 (144) bps
Extra ordinary items 94 281 (66.5) (73) (229.3)
Reported PAT 7,872 6,866 14.7 8,714 (9.7)
Ann. EPS (Rs) 14.4 12.2 18.1 16.3 (11.5)
Source: Company, India Infoline Research

Revenues in line with expectations

HUL Q4 FY13 revenues were almost in line with our expectations (of ~Rs63bn) at Rs63.7bn – up by 12.5% yoy led by 13.1% yoy growth in domestic FMCG business. Underlying volume growth improved marginally to 6% yoy from 5% in Q3 FY13 but is still low compared to 10% in Q4 FY12. The growth could have been even better but for weakness in discretionary categories, slowdown in skincare brands and lower modern retail sales.


Revenue break-up
(Rs m) Q4 FY13 Q4 FY12 Growth Q3 FY13 Growth
  (3) (3) % yoy (3) % qoq
Domestic FMCG - HPC 49,605 44,026 12.7 50,708 (2.2)
Domestic FMCG - Foods 11,673 10,144 15.1 10,877 7.3
a) Domestic FMCG - Total 61,277 54,170 13.1 61,585 (0.5)
b) Others 2,394 2,435 (1.7) 2,752 (13.0)
Total (a+b) 63,671 56,605 12.5 64,337 (1.0)
Source: Company, India Infoline Research

The core Soaps and Detergents segment; contributing ~49% to revenues and ~39% to EBIT registered 12.6% yoy growth at Rs31.9bn (double digit volume growth in Surf and Rin). Personal products segment recorded 12.1% yoy growth in revenues at Rs18.3bn primarily led by strong growth in hair and oral care segment (strong growth in brands – Ponds and Dove). The management has stated that the skin care category is still witnessing a slowdown thereby impacting performance of its key brand Fair & Lovely. Beverages segment registered 18.3% yoy growth in revenues led by double digit growth across all key tea and coffee brands. Revenues from the packaged foods segment witnessed slower 7% yoy increase at Rs3.7bn driven by Kissan and Knorr brands. Ice cream segment however was impacted by slowdown in discretionary spend.


Segment-wise revenue trend
Segments FY12 FY13
(Rs m) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Soaps & Detergents 25,576 25,961
BSE 1,316.60 [7.05] ([0.53]%)
NSE 1,317.80 [3.80] ([0.29]%)

***Note: This is a NSE Chart

 

Advertisements

  • Save upto Rs.2.67 lakh with Pradhan Mantri Awas Yojana ...Know more
  • Now Save Rs.3150 on your Demat Account ...Click here
  • Now get IIFL Personal Loan in just 8* hours...APPLY NOW!
  • Get the most detailed result analysis on the web - Real Fast!
  • Actionable & Award-Winning Research on 500 Listed Indian Companies.