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Hindustan Unilever
Volume growth trends - While Sep’11 qtr registered strong volume growth of 10%,
mgmt noted that it did benefit to some extent from advancement of festive season
sales. They have started to notice some slowdown in volume growth rates in recent
months and even AC Nielsen data suggests moderation in volume offtake at industry
level both in rural and urban markets. Encouragingly unlike 2008 they have not seen
any downtrading yet on account of inflationary pressures.
Pricing - Mgmt noted that they had started to take price increases in Dec’10, hence
anniversarisation impact of pricing will start happening from Dec’11 onwards.
Incremental pricing decisions will depend on input cost inflation/competition.
Rupee depreciation is a significant concern - While impact of currency is
significant, the timing and extent would depend on kind of covers/hedges they are
holding. Mgmt noted that they are nearly fully hedged since last 2-3 years.
Competitive Intensity - Maintained that competitive intensity in FMCG space will
increase from hereon given the attractiveness of Indian market. However HUL will
benefit from its wide portfolio, global capabilities and distribution strength. Over
past five years they have noticed a strong trend towards premiumisation and they
believe their global portfolio is well placed to benefit from this trend in India.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Hindustan Unilever
Volume growth trends - While Sep’11 qtr registered strong volume growth of 10%,
mgmt noted that it did benefit to some extent from advancement of festive season
sales. They have started to notice some slowdown in volume growth rates in recent
months and even AC Nielsen data suggests moderation in volume offtake at industry
level both in rural and urban markets. Encouragingly unlike 2008 they have not seen
any downtrading yet on account of inflationary pressures.
Pricing - Mgmt noted that they had started to take price increases in Dec’10, hence
anniversarisation impact of pricing will start happening from Dec’11 onwards.
Incremental pricing decisions will depend on input cost inflation/competition.
Rupee depreciation is a significant concern - While impact of currency is
significant, the timing and extent would depend on kind of covers/hedges they are
holding. Mgmt noted that they are nearly fully hedged since last 2-3 years.
Competitive Intensity - Maintained that competitive intensity in FMCG space will
increase from hereon given the attractiveness of Indian market. However HUL will
benefit from its wide portfolio, global capabilities and distribution strength. Over
past five years they have noticed a strong trend towards premiumisation and they
believe their global portfolio is well placed to benefit from this trend in India.
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