Hindustan Unilever Margin levers to play-out, Maintain Accumulate :Emkay

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Hindustan Unilever

Margin levers to play-out, Maintain Accumulate

ACCUMULATE

CMP: Rs323                                        Target Price: Rs328

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n     Results are in line with expectations - Sales growth at 14.7% to Rs 55.8 bn is driven by 8.3% volume growth and APAT growth of 10.5% to Rs 5.7 bn

n     Soaps and detergents grew 12.8% and PBIT margins witnessed qoq improvement of 170 bps to 9.2%. Personal products grew 19.4% with 50 bps PBIT margin expansion yoy

n     Though implied price-led growth of 6.4% is the highest in last 8 quarters, pricing actions are yet to play out.  We foresee improvement in EBITDA margins on qoq basis

n     Raise our FY12E/13E EPS by 2% to Rs 11.1 and by 5% to Rs 12.6, respectively. We maintain our ACCUMULATE rating with target price of Rs 328/share