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Proctor and Gamble has cut shampoo (Pantene) prices by 15%. We believe
that the company despite its weaker distribution power will still impact
HUL's shampoo brand "Clear Plus" and "Dove". Clear Plus is an approx INR
6 bn brand with 60% of its sales coming from sachets and Dove is an approx
INR 5 bn brand (soaps and shampoos put together) and is the fastest growing
brand for HUL. HUL has an approximately 45% market share in shampoos
and we believe that it will respond to maintain its market share.
Ironically, this battleground has opened the day HUL announced an upward
reveision in detergent prices by 2-9%. Call this reversion to the mean!!!
Additionally, the company is facing tremendous pressure on the raw material
front esp palm oil (up 56% YoY, 15% QoQ).
Maintain EPS of INR 10 per share in FY11and INR 12 per share in FY12.
Maintian hold (TP Rs266).
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Proctor and Gamble has cut shampoo (Pantene) prices by 15%. We believe
that the company despite its weaker distribution power will still impact
HUL's shampoo brand "Clear Plus" and "Dove". Clear Plus is an approx INR
6 bn brand with 60% of its sales coming from sachets and Dove is an approx
INR 5 bn brand (soaps and shampoos put together) and is the fastest growing
brand for HUL. HUL has an approximately 45% market share in shampoos
and we believe that it will respond to maintain its market share.
Ironically, this battleground has opened the day HUL announced an upward
reveision in detergent prices by 2-9%. Call this reversion to the mean!!!
Additionally, the company is facing tremendous pressure on the raw material
front esp palm oil (up 56% YoY, 15% QoQ).
Maintain EPS of INR 10 per share in FY11and INR 12 per share in FY12.
Maintian hold (TP Rs266).
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