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Hindustan Unilever -
Margins to remain muted in pursuit of volume growth
Having met with management today at our 15th Annual India Investor
Conference in New Delhi, these are some of our takeaways...
„Revival in volume growth is a positive
Company has managed a healthy 10-13% volume growth over the last four
quarters. Consumer demand remains strong and management remains confident
that healthy volume growth will be maintained despite an unfavorable base going
forward. This will be supported by strong A&P push across brands and
categories.
Profitability remains a concern
HUL is in a situation where they are able to drive volume growth and maintain
market share only through massive A&P spends and price cuts. This when
combined with input cost pressures currently being faced is resulting in significant
margin pressure. The company will look at targeted price hikes to ease margin
pressures but will be constrained by the primary focus being volume growth and
market share.
New product launches are the key
HUL has in last few months picked up momentum in terms of new category,
product and brand launches especially in Personal Care and Foods. Initial results
of these launches appear to be positive and success here could be the key for
HUL to get out of its current lean run with operating performance.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Hindustan Unilever -
Margins to remain muted in pursuit of volume growth
Having met with management today at our 15th Annual India Investor
Conference in New Delhi, these are some of our takeaways...
„Revival in volume growth is a positive
Company has managed a healthy 10-13% volume growth over the last four
quarters. Consumer demand remains strong and management remains confident
that healthy volume growth will be maintained despite an unfavorable base going
forward. This will be supported by strong A&P push across brands and
categories.
Profitability remains a concern
HUL is in a situation where they are able to drive volume growth and maintain
market share only through massive A&P spends and price cuts. This when
combined with input cost pressures currently being faced is resulting in significant
margin pressure. The company will look at targeted price hikes to ease margin
pressures but will be constrained by the primary focus being volume growth and
market share.
New product launches are the key
HUL has in last few months picked up momentum in terms of new category,
product and brand launches especially in Personal Care and Foods. Initial results
of these launches appear to be positive and success here could be the key for
HUL to get out of its current lean run with operating performance.
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