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Hindustan Unilever
�� Volume growth higher than the market volume growth, will likely continue to be the key
focus area for HUL going forward. The above average volume growth will result from
new products from existing categories and increased usage for existing products.
�� For achieving above average growth, HUL would be willing to sacrifice operating
margins in the short term for long term market share gain.
�� The focus would be on masstige brands which fill the gap between prestige and mass
market.
�� HUL will likely continue to spend on the brands and invest in creation of new products in
existing categories. The average advertisement to sales ratio over the last 5 quarters has
been 14.5% and should continue to remain around that range.
�� The company is increasingly focusing and allocating resources at the premium end of
product categories relative to the lower end of the range as the premium products have
higher margins.
�� Price war in laundry category continues. Despite that, the company has been able to
grow laundry revenues by 7% (double digit volume growth with a price cut).
�� The volume growth in HPC categories has been lower than some of the newer
categories.
�� The management believes that at some point in time FDI in retail will be allowed.
�� Implementation of GST is still 12-18 months away. Realizing the benefits of GST would
take another 3 years.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Hindustan Unilever
�� Volume growth higher than the market volume growth, will likely continue to be the key
focus area for HUL going forward. The above average volume growth will result from
new products from existing categories and increased usage for existing products.
�� For achieving above average growth, HUL would be willing to sacrifice operating
margins in the short term for long term market share gain.
�� The focus would be on masstige brands which fill the gap between prestige and mass
market.
�� HUL will likely continue to spend on the brands and invest in creation of new products in
existing categories. The average advertisement to sales ratio over the last 5 quarters has
been 14.5% and should continue to remain around that range.
�� The company is increasingly focusing and allocating resources at the premium end of
product categories relative to the lower end of the range as the premium products have
higher margins.
�� Price war in laundry category continues. Despite that, the company has been able to
grow laundry revenues by 7% (double digit volume growth with a price cut).
�� The volume growth in HPC categories has been lower than some of the newer
categories.
�� The management believes that at some point in time FDI in retail will be allowed.
�� Implementation of GST is still 12-18 months away. Realizing the benefits of GST would
take another 3 years.
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