About The CompanyThe most recognized and reputed company of FMCG sector having a significant market ratio in the retail segment. The stock being heavy weight on the Indian capital market Indices , failed to show any performance even during the rally of 2005 to 2007 , when all index stock has outperformed and drag the Sensex to a record level of 21200.
About The Results
In the current quarter, the company is expected to have higher volumes and better margins as it will reap the benefits of the lower costs. Following the excise duty cuts and the fall in raw material prices like such as palm oil, LAB and HDPE; HUL reduced prices of its products and increased the grammage in select stock keeping units (SKUs) towards the end of January 2009. This is done mainly in its soaps and detergents segment, which is one of its biggest revenue earners.
There is no doubt the company is facing stiff competition from other FMCG brands and has been steadily losing its market share. Hopefully, the price reduction would help the company regain some of its lost market share. In the coming months, cost control and improving volumes would be the biggest priority. Profit margins are expected to grow more due to the fall in the raw material costs. Hopefully, the current tightening of the purse strings would soon get loosened, meaning more buying for HUL’s products. The company is expected to maintain its growth in the coming months.
About The Stock
FMCG stocks faced meltdown some days ago and this was after foreign brokerage JPMorgan Chase & Company cut rating on the stock to 'underweight' from 'neutral', citing weakening growth and increasing competition. But since then it has recovered remarkably.
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