HUL | 1QFY2012 Result Update

July 29, 2011

HUL
Performance Highlights
(`cr) Revenue EBITDA OPM (%) PAT
Source: Company, Angel Research

NEUTRAL
CMP Target Price
1QFY11
4,793.9 598.6 12.5 514.7

`324 -

1QFY12
5,503.9 678.8 12.3 568.4

% yoy
14.8 13.4 (15bp) 10.4

Angel Est
5,462.3 709.0 13.0 609.0

% Diff
0.8 (4.3) (65bp) (6.7)

Investment Period
Stock Info Sector Market Cap (` cr) Beta 52 Week High / Low Avg. Daily Volume Face Value (`) BSE Sensex Nifty Reuters Code Bloomberg Code

FMCG 70,676 0.6 346/250 2,44,302 1.0 18,197 5,482 HUL.BO HUVR@IN

HUL posted a good set of numbers for the quarter, largely in-line with our estimates. The companys top-line grew by 14.8% yoy to `5,504cr (`4,794cr). Recurring earnings for the quarter grew by 10.4% yoy, above our estimates. During the quarter, the soaps and detergent (S&D) segment posted 12.8% yoy revenue growth, while its EBIT margin contracted by 175bp yoy to 9%. The food business reported 17.8% yoy growth (it now includes ice creams as well). The personal products segment grew by 19.4% yoy, registering the ninth consecutive quarter of double-digit volume-led growth. We remain Neutral on the stock. Volume growth slows down to a single digit: HUL posted top-line growth of 14.8% yoy to `5,504cr (`4,794cr), driven by disappointing volume growth of 8% yoy. Overall, FMCG sales grew by 15% yoy, aided by 15% yoy growth in home and personal care (HPC) and 15% yoy growth in foods businesses. At the operating level, OPM remained flat and declined by 15bp yoy. However, the decline in OPM was capped by lower ad spends (down 417bp yoy). Gross margin during the quarter dipped by 482bp yoy on account of raw-material price inflation. In terms of earnings, HUL posted a 10.4% yoy increase to `568cr (`514cr). Outlook and valuation: We expect HUL to post a ~13% CAGR in its top line over FY201113E, largely aided by steady performance of the companys personal care and foods division (aided by innovations and higher ad spends), spike in detergents volume growth and modest performance of its soaps business (aided by brand re-launches). In terms of earnings, we expect HUL to post a ~17% CAGR. At the CMP of `324, the stock is trading at 24.2x FY2013E earnings, which is in-line with its historical valuations. We see a limited upside in the stock price and, hence, maintain our Neutral view on the stock.

Shareholding Pattern (%) Promoters MF /Banks /Indian FIs FII /NRIs /OCBs Indian Public /Others 52.5 14.1 18.7 14.7

Abs. (%) Sensex HUL

3m (5.7) 14.4

1yr 1.1 26.3

3yr 31.9 36.4

Key financials
Y/E March (` cr) Net sales % chg Net profit (Adj.) % chg OPM (%) EPS (`) P/E (x) P/BV (x) RoE (%) RoCE (%) EV/Sales (x) EV/EBITDA (x)
Source: Company, Angel Research

FY2010 17,524 (13.4) 2,103 (15.9) 14.5 9.7 32.1 27.1 90.5 101.3 3.9 26.5

FY2011E 19,401 10.7 2,099 (0.2) 12.2 9.7 30.3 22.4 73.6 74.7 3.5 28.3

FY2012E 21,865 12.7 2,523 20.2 13.4 11.7 27.7 19.3 74.9 79.9 3.0 22.6

FY2013E 24,637 12.7 2,886 14.4 13.9 13.4 24.2 17.0 74.7 82.0 2.7 19.2 Sreekanth P.V.S
022 3935 7800 Ext: 6841

sreekanth.s@angelbroking.com

Please refer to important disclosures at the end of this report

HUL | 1QFY2012 Result Update

Exhibit 1: Quarterly performance

Y/E March (` cr) Net Sales Consumption of RM (% of Sales) Staff Costs (% of Sales) Advertising Expense (% of Sales) Other Expenses (% of Sales) Total Expenditure Operating Profit OPM (%) Interest Depreciation Other Income PBT (excl. Extr. Items) Extr. Income/(Expense) PBT (incl. Extr. Items) (% of Sales) Provision for Taxation (% of PBT) Recurring PAT PATM (%) Reported PAT Equity shares (cr) FDEPS (`)

4QFY11 5,503.9 3,074.2 55.9 286.2 5.2 633.0 11.5 831.8 15.1 4,825.1 678.8 12.3 0.0 56.2 126.1 748.7 58.8 807.4 14.7 180.2 24.1 568.4 10.3 627.2 218.2 2.9

4QFY10 4,793.9 2,446.6 51.0 250.6 5.2 751.2 15.7 746.9 15.6 4,195.3 598.6 12.5 0.1 53.5 124.5 669.5 18.5 688.0 14.4 154.8 23.1 514.7 10.7 533.2 218.2 2.4

% yoy 14.8 25.6 14.2 (15.7) 11.4 15.0 13.4 (75.0) 5.0 1.3 11.8 17.4 16.4 10.4 17.6 17.6

FY2011 19,401.1 10,056.8 51.8 961.3 5.0 2,764.2 14.2 3,253.6 16.8 17,035.9 2,365.2 12.2 0.2 220.8 586.0 2,730.2 206.8 2,937.0 15.1 631.0 23.1 2,099.2 10.8 2,306.0 218.2 10.6

FY2010 17,523.8 8,877.9 50.7 936.3 5.3 2,391.4 13.6 2,769.7 15.8 14,975.4 2,548.4 14.5 7.0 184.0 349.6 2,707.1 111.3 2,818.4 16.1 616.4 22.8 2,090.7 11.9 2,202.0 218.2 10.1

% chg 10.7 13.3 2.7 15.6 17.5 13.8 (7.2) (96.7) 20.0 67.6 0.9 4.2 2.4 0.4 4.7 4.7

Source: Company, Angel Research

Revenue in-line with estimates, volume growth falls to single digit

HUL posted top-line growth of 14.8% yoy to `5,503cr (`4,793cr), driven by disappointing volume growth of 8% yoy. (Volume growth was the slowest compared to the past several quarters.) The company took a price hike of 67% during the quarter. Overall, FMCG sales grew by 15% yoy, aided by 15% yoy growth in HPC and 15% yoy growth in foods business. In HPC, the S&D segment posted growth of 12.8% yoy despite price hikes and intense competition in the detergents category. In detergents, all three brands Rin, Surf, and Wheel delivered double-digit volume growth. Personal products registered 19.4% yoy growth, the ninth consecutive quarter of double-digit volume-led growth. In foods business, all segments grew well, contributing to the companys growth (beverages grew by 13% yoy and packaged foods (which now include processed foods and ice creams) grew by 17.8% yoy.

July 29, 2011

HUL | 1QFY2012 Result Update

Exhibit 2: Double-digit top-line growth continues

6,000 5,000 4,000 16.0 14.0 12.0 10.0 8.0 6.0 4.0 2.0 -

Exhibit 3: Volumes decline to a single-digit growth rate

16 14 12 10 8 6 4 2 14 11 11 8 5 2 1 13 14

(` cr)

2,000 1,000 -

1Q10

2Q10

3Q10

4Q10

1Q11

2Q11

3Q11

4Q11

1Q12

(%)

3,000

(%)

1Q10

2Q10

3Q10

4Q10

1Q11

2Q11

3Q11

4Q11 3Q11 4Q11

Top-line (LHS)

yoy growth (RHS)

Source: Company, Angel research

Source: Company, Angel research

Recurring earnings up by 10.4% yoy, margin remains flat

In terms of earnings, HUL posted a 10.4% yoy increase to `568cr (`514cr) on a recurring basis. Although on a reported basis, the company grew by 17.6% yoy due to an exceptional item. During the quarter, under the interest cost, other income remained flat. Depreciation cost, on the other hand, increased by 270bp.

OPM flat, curtailed by cut in ad spends

At the operating level, HUL posted flat OPM, which dipped marginally by 15bp yoy. The company reported gross margin contraction of 482bp yoy. During the quarter, HUL cut its ad spends by 417bp yoy and protected the fall in OPM. Staff cost remained flat and other expenses declined by 47bp yoy.

Exhibit 4: Earnings growth higher than expected

710 610 510 410 310 210 110 10 40.0 30.0 20.0 10.0 (10.0) (20.0) (30.0)

Exhibit 5: Margin remains a concern

60.0 50.0 40.0 30.0 20.0 10.0 15.4 14.4 16.0 12.3 12.5 12.0 12.4 11.8 10.3 48.4 49.3 50.9 48.6 49.0 49.1 48.9 45.7 44.1

`cr)

1Q10

2Q10

3Q10

4Q10

1Q11

2Q11

3Q11

4Q11

1Q12

( %)

(%)

1Q10

2Q10

3Q10

4Q10

1Q11

2Q11

1Q12 1Q12

PAT (LHS)

yoy growth (RHS)

OPM

Gross margin

Source: Company, Angel Research

Source: Company, Angel Research

July 29, 2011

HUL | 1QFY2012 Result Update

Exhibit 6: Segment-wise performance

Y/E March (` cr) Soaps & Detergents Personal Products Beverages Packaged Foods Exports Others Less: Inter Segment Revenue Total Gross Income Soaps & Detergents Personal Products Beverages Packaged Foods Exports Others Total PBIT Less: Interest Exp Less: Other Unallocable Exp PBT PBIT Margin (%) Soaps & Detergents Personal Products Beverages Packaged Foods Exports Others
Source: Company, Angel Research

1QFY12 2,555 1,631 609 372 306 107 5,579 236 413 75 17 24 (3) 763 (0) 77 840 9 25 12 5 8 (2)

1QFY11 % chg 2,264 1,366 538 316 265 113 4,861 249 339 70 26 23 (27) 679 (0) 112 790 11 25 13 8 9 (24) 6.3 29.7 4.4 14.8 (5.1) 22.0 8.4 12.8 19.4 13.1 17.8 15.7 (5.3)

FY2011 FY2010 % chg 8,792 5,844 2,344 1,177 1,100 438 834 1,495 358 28 92 (75) 2,731 (0) 202 2,933 9 26 15 2 8 (17) 8,266 5,048 2,142 962 1,005 347 (4) 10.9 15.3 11.9 56.3 (2.2) 1,185 (29.6) 1,297 320 59 (72) 2,793 (7) (36) 2,750 14 26 15 0 6 (21) 6.7 6.4 15.8 9.4 22.4 9.4 26.3

19,694 17,766

4 535.1

July 29, 2011

HUL | 1QFY2012 Result Update

S&D posts double-digit growth, all brands perform well

HULs S&D segment registered 12.8% yoy growth, with all its key brands performing well. The competitive intensity in the category remained high as always. EBIT margin of the segment fell due to high palm oil prices. While we have modeled in an 8.5% CAGR in S&D revenue over FY201113E, going ahead we expect the S&D category to post higher volume growth (aided by low base and corrective actions). Moreover, the recent price hikes in select SKUs of soaps and detergents are likely to aid margin recovery in the coming quarters. A key risk to our call of recovery in the S&D segment emanates from lack of pricing power recovery, growing market share of ITC and rising palm oil prices.

Exhibit 7: S&D continues with impressive growth

3,000 2,500 2,000 15.0 10.0

Exhibit 8: High palm oil prices impact EBIT margin

500 400 20.0 15.0 10.0 5.0 -

(` cr)

(`cr)

(%)

1,500 1,000 500 -

5.0 (5.0)

200 100 -

1Q10

2Q10

3Q10

4Q10

1Q11

2Q11

3Q11

4Q11

1Q12

1Q10

2Q10

3Q10

4Q10

1Q11

2Q11

3Q11

4Q11

Top-line (LHS)

yoy growth (RHS)

EBIT (LHS)

EBIT % (RHS)

Source: Company, Angel Research

Source: Company, Angel Research

Personal product sales continue to post double-digit volume growth

The personal products segment registered 19.4% yoy growth, the ninth consecutive quarter of double-digit growth. All skin care brands posted double-digit volume growth. Hair care and oral care also performed well, with hair care witnessing sustained double-digit volume growth. Toothpastes also performed well, with brands such as Close up and Pepsodent showing strong growth. Hence, the segments margin showed an expansion of 50bp yoy to 25%. For the personal products segment, we have modeled in a 15.7% CAGR in revenue and flat margin over FY201113E on account of higher advertisement spends.

July 29, 2011

1Q12

(%)

300

HUL | 1QFY2012 Result Update

Exhibit 9: Nine quarters of double-digit growth

2,000 1,500 25.0 20.0

Exhibit 10: EBIT margin expands yoy by 50bp

600 500 400 35.0 30.0 25.0 15.0 10.0 5.0 -

(`cr)

(%)

1,000 500 -

(`cr)

10.0 5.0 -

300 200 100 -

1Q10

2Q10

3Q10

4Q10

1Q11

2Q11

3Q11

4Q11

1Q12

1Q10

2Q10

3Q10

4Q10

1Q11

2Q11

3Q11

4Q11

Top-line (LHS)

yoy growth (RHS)

EBIT (LHS)

EBIT % (RHS)

Source: Company, Angel research

Source: Company, Angel research

Foods segment registers 15% yoy growth

The foods segment recorded 15% yoy growth, driven largely by strong growth in packaged foods and ice creams. Packaged foods grew by 17.8% yoy and beverages grew by 13.1% yoy. Packaged foods now include processed foods and ice creams.

Investment Rationale
Brand positioning shift from the mass-market segment to the premium market segment: HUL has been very actively re-launching products from its existing brands and has increased the pace of new launches, targeting the mid/premium market segment (launched Ponds Gold Radiance and relaunched Dove and Rin in the personal products and the S&D categories, respectively). This in our view is positive, considering that the company will have a better control on pricing. Moreover, constant innovations have helped HUL stabilise its market share losses. However, we retain a slight caution against ITCs commitment to categories such as soaps, shampoos and skin care, which may pose a major threat to HUL in the long run. We model in an 8.5% and a 15.7% CAGR in the S&D and personal products segments revenue over FY201113E and expect margin to come in at ~12% and ~25% for S&D and personal products segments, respectively. Strong domestic play and strong balance sheet provide further impetus: HUL, with its iconic brands, has sustained its volume growth, which is impressive given the recent price hike and strong competitive scenario, indicating a revival in consumer demand and higher growth in the mid/premium endmarket segment. Moreover, HUL is a cash rich, zero debt company enjoying high RoE of ~75%. We have modeled a recurring earning CAGR of ~17% over FY201113E, though we expect the companys margin to be under pressure due to high input cost inflation.

July 29, 2011

1Q12

(%)

15.0

20.0

HUL | 1QFY2012 Result Update

Outlook and valuation

We expect HUL to post a ~13% CAGR in its top line over FY201113E, largely aided by steady performance of the companys personal care and foods division (aided by innovations and higher ad spends), spike in detergents volume growth and modest performance of its soaps business (aided by brand re-launches). In terms of earnings, we expect HUL to post a ~17% CAGR. At the CMP of `324, the stock is trading at 24.2x FY2013E earnings, which is in-line with its historical valuations. We see a limited upside in the stock price and, hence, maintain our Neutral view on the stock.

Exhibit 11: Key assumptions

FY2009# Top-line (` cr) Soaps & Detergents Personal Products Beverages Packaged Foods Exports Others Top-line growth (%) Soaps & Detergents Personal Products Beverages Packaged Foods Exports Others PBIT (` cr) Soaps & Detergents Personal Products Beverages Packaged Foods Exports Others PBIT Margin (%) Soaps & Detergents Personal Products Beverages Packaged Foods Exports Others
Source: Company, Angel Research

FY2010 8,266 5,048 2,142 917 1,005 347 1.5 15.6 14.7 39.7 (14.6) 10.3 1,185 1,297 320 4 59 (72) 14.3 25.7 14.9 0.5 5.8 (20.8)

FY2011 8,792 5,844 2,344 1,177 1,100 438 6.4 15.8 9.4 28.4 9.4 26.3 834 1,495 358 28 92 (75) 9.5 25.6 15.3 2.4 8.3 (17.1)

FY2012E 9,495 6,750 2,555 1,460 1,210 526 8.0 15.5 9.0 24.0 10.0 20.0 1,139 1,721 396 77 99 (58) 12.0 25.5 15.5 5.3 8.2 (11.0)

FY2013E 10,349 7,830 2,785 1,825 1,337 641 9.0 16.0 9.0 25.0 10.5 22.0 1,242 1,997 432 97 110 (71) 12.0 25.5 15.5 5.3 8.2 (11.0)

9,885 5,385 2,300 808 1,576 359 1,482 1,429 308 1 108 (134) 15.0 26.5 13.4 0.2 6.9 (37.5)

July 29, 2011

HUL | 1QFY2012 Result Update

Exhibit 12: Peer valuation

Company
Asian Paints Britannia Colgate Dabur GSKCHL GCPL HUL ITC Marico Nestle

Reco
Neutral Neutral Reduce Accumulate Reduce Accumulate Neutral Neutral Neutral Reduce

Mcap (` cr)
29,983 5,758 13,217 18,147 10,143 14,099 70,676 161,185 10,279 41,935
#

CMP (`)
3,126 482 972 104 2,412 436 324 208 167 4,349

TP* (`)
869 115 2,163 478 3,483

Upside (%)
(3) 3 (11) 10 (10) 10 (1) (2) (5) (20)

P/E (x) FY12E FY13E

30.5 31.3 30.1 25.9 29.2 24.1 27.7 27.8 31.6 43.1 24.8 21.4 25.7 22.6 24.5 21.0 24.2 23.4 25.3 36.2

EV/Sales (x) FY12E FY13E

3.2 1.1 5.0 3.6 3.4 3.6 3.0 6.2 3.0 5.7 2.7 1.0 4.3 3.1 2.8 3.2 2.7 5.2 2.6 4.9

RoE (%) FY12E FY13E

39.6 37.8 111.7 44.9 32.6 38.7 74.9 32.7 31.5 91.1 38.3 46.1 108.0 41.6 31.8 28.0 74.7 31.5 29.5 72.9

CAGR # Sales PAT

17.3 17.3 14.9 20.5 17.3 13.4 12.7 17.6 15.7 16.1 19.8 36.0 12.9 18.8 17.5 18.2 17.2 17.4 30.8 18.9

Source: Company, Angel Research, Note: denotes CAGR for FY2011-13E

Exhibit 13: Angel vs. Consensus estimates

Top-line (` cr) Angel estimates Consensus Diff (%)
Source: Company, Angel Research

FY2012E 21,865 22,710 (3.7)

FY2013E 24,637 25,398 (3.0)

EPS (`) Angel estimates Consensus Diff (%)

FY2012E 11.7 11.1 5.3

FY2013E 13.4 12.7 5.2

Exhibit 14: ReturnsHUL vs. Sensex (Indexed to 100)

200% 180%
Sensex HUL

Exhibit 15: One-year forward P/E band

400 350 300 250 200 150 100 50 15x 18x 21x 24x

140% 120% 100% 80%

Oct-10 Sep-10 Nov-10 Feb-11 May-11 Dec-10 Jan-11 Aug-10 Mar-11 Apr-11 Jun-11 Jul-10

Share Price (`)

160%

Dec-05

Dec-07

Aug-06

Aug-08

Dec-09

Apr-05

Apr-07

Aug-10

Apr-09

Source: Company, Angel Research

Source: Company, Angel Research

Exhibit 16: One-year forward P/E chart

40.0 35.0 30.0 25.0 20.0 15.0 10.0 5.0 -

Exhibit 17: One-year forward Prem vs. Sensex chart

200% 150% 100% 50% 0% -50%

Jul-05 Nov-05 Mar-06 Jul-06 Nov-06 Mar-07 Jul-07 Nov-07 Mar-08 Jul-08 Nov-08 Mar-09 Jul-09 Nov-09 Mar-10 Jul-10 Nov-10 Mar-11 Jul-11

Source: Company, Angel Research, Note: Blue line indicates 5-year average

Source: Company, Angel Research, Note: Blue line indicates 5-year average

July 29, 2011

Apr-02 Oct-02 Apr-03 Oct-03 Apr-04 Oct-04 Apr-05 Oct-05 Apr-06 Oct-06 Apr-07 Oct-07 Apr-08 Oct-08 Apr-09 Oct-09 Apr-10 Oct-10 Apr-11

Apr-11

HUL | 1QFY2012 Result Update

Profit & Loss Statement

Y/E March (` cr) Gross sales Less: Excise duty Net Sales Total operating income % chg Total Expenditure Cost of Materials Advertising Exp Personnel Others EBITDA % chg (% of Net Sales) Depreciation& Amortisation EBIT % chg (% of Net Sales) Interest & other Charges Other Income (% of PBT) Share in profit of Associates Recurring PBT % chg Extraordinary Expense/(Inc.) PBT (reported) Tax (% of PBT) PAT (reported) Add: Share of associates Less: Minority interest (MI) PAT after MI (reported) ADJ. PAT % chg (% of Net Sales) Basic EPS (`) Fully Diluted EPS (`) % chg CY07 14,715 1,040 13,675 13,675 13.0 11,797 7,269 1,440 768 2,320 1,879 14.0 13.7 138 1,740 14.7 12.7 25 432 20.1 2,146 15.3 (182) 2,329 403 18.8 1,743 1,743 1,925 3.8 14.1 8.0 8.0 14.7 FY09# 21,650 1,410 20,239 20,239 48.0 17,583 10,810 2,131 1,152 3,490 2,656 41.4 13.1 195 2,461 41.4 12.2 25 590 19.5 3,025 40.9 4 3,021 524 17.3 2,501 2,501 2,496 29.7 12.3 11.5 11.5 43.3 FY10 18,220 696 17,524 17,524 (13.4) 14,975 8,878 2,391 936 2,770 2,548 (4.1) 14.5 184 2,364 (3.9) 13.5 7 350 12.9 2,707 (10.5) (99) 2,806 604 22.3 2,103 2,103 2,202 (11.8) 12.6 9.6 9.6 (16.0) FY11 20,262 861 19,401 19,401 10.7 17,036 10,057 2,764 961 3,254 2,365 (7.2) 12.2 221 2,144 (9.3) 11.1 0 586 21.5 2,730 0.9 (207) 2,937 631 23.1 2,099 2,099 2,306 4.7 11.9 9.7 9.7 0.9 FY12E 22,895 1,030 21,865 21,865 12.7 18,924 10,977 3,170 1,104 3,673 2,940 24.3 13.4 247 2,693 25.6 12.3 0 584 17.8 3,277 20.0 0 3,277 754 23.0 2,523 2,523 2,523 9.4 11.5 11.7 11.7 20.2 FY13E 25,852 1,215 24,637 24,637 12.7 21,201 12,147 3,696 1,244 4,114 3,436 16.9 13.9 273 3,163 17.5 12.8 0 609 16.1 3,772 15.1 0 3,772 886 23.5 2,886 2,886 2,886 14.4 11.7 13.4 13.4 14.4

July 29, 2011

HUL | 1QFY2012 Result Update

Balance Sheet
Y/E March (` cr) SOURCES OF FUNDS Equity Share Capital Preference Capital Reserves& Surplus Shareholders Funds Minority Interest Total Loans Deferred Tax Liability Total Liabilities APPLICATION OF FUNDS Gross Block Less: Acc. Depreciation Net Block Capital Work-in-Progress Goodwill Investments Current Assets Cash Loans & Advances Other Current liabilities Net Current Assets Total Assets 2,669 1,147 1,523 186 1,441 3,277 201 680 2,397 5,111 (1,834) 1,315 2,882 1,275 1,607 472 333 5,601 1,777 758 3,066 5,784 (183) 2,229 3,582 1,420 2,162 274 1,264 5,368 1,892 617 2,858 6,733 (1,365) 2,335 4,000 1,641 2,360 400 1,764 5,762 1,892 698 3,171 7,416 (1,654) 2,870 4,417 1,888 2,529 442 2,264 6,364 2,012 809 3,543 8,227 (1,863) 3,372 4,879 2,161 2,717 488 2,764 6,961 2,051 924 3,985 9,073 (2,112) 3,857 218 1,221 1,439 89 (212) 1,315 218 1,844 2,062 422 (255) 2,229 218 2,365 2,584 0 (249) 2,335 216 2,903 3,119 0 (249) 2,870 216 3,405 3,621 0 (249) 3,372 216 3,890 4,106 0 (249) 3,857 CY07 FY09# FY10 FY11 FY12E FY13E

Cash Flow Statement

Y/E March (` cr) Profit before tax Depreciation Change in Working Capital Interest / Dividend (Net) Direct taxes paid Others Cash Flow from Operations (Inc.)/ Dec. in Fixed Assets (Inc.)/ Dec. in Investments Cash Flow from Investing Issue of Equity Inc./(Dec.) in loans Dividend Paid (Incl. Tax) Interest / Dividend (Net) Cash Flow from Financing Inc./(Dec.) in Cash Opening Cash balances Closing Cash balances CY07 2,146 138 122 (142) 403 (26) 1,836 (289) 998 709 (633) 16 2,292 (148) (2,762) (216) 417 201 FY09# 3,025 195 (330) (126) 524 (19) 2,220 (629) 1,167 538 39 333 1,677 (122) (1,181) 1,576 201 1,777 FY10 2,707 184 1,391 (122) 604 (84) 3,473 (502) (931) (1,434) 32 (422) 1,656 (122) (1,924) 115 1,777 1,892 FY11E 2,730 221 309 (174) 631 186 2,642 (544) (500) (1,044) (2) 0 1,769 (174) (1,597) 0 1,892 1,892 FY12E 3,277 247 336 (189) 754 (8) 2,910 (459) (500) (959) 0 0 2,021 (189) (1,832) 119 1,892 2,012 FY13E 3,772 273 278 (209) 886 11 3,239 (508) (500) (1,008) 0 0 2,400 (209) (2,192) 40 2,012 2,051

July 29, 2011

10

HUL | 1QFY2012 Result Update

Key Ratios
Y/E March Valuation Ratio (x) P/E (on FDEPS) P/CEPS P/BV Dividend yield (%) EV/Sales EV/EBITDA EV / Total Assets Per Share Data (`) EPS (Basic) EPS (fully diluted) Cash EPS DPS Book Value Returns (%) RoCE Angel RoIC (Pre-tax) RoE Turnover ratios (x) Asset Turnover Inventory / Sales (days) Receivables (days) Payables (days) Net Working capital (days) 5.1 52 12 102 (54) 7.0 46 10 77 (35) 4.9 45 14 110 (68) 4.9 46 14 111 (67) 5.0 46 14 109 (65) 5.1 46 13 106 (62) 89.5 83.7 138.9 142.9 103.6 90.5 82.4 73.6 86.3 74.9 87.5 74.7 8.0 8.1 8.7 9.1 6.7 11.5 11.6 12.5 7.5 9.5 9.6 9.7 10.6 6.5 12.0 9.7 9.7 10.7 7.0 14.4 11.7 11.7 12.8 8.0 16.8 13.4 13.4 14.6 9.5 19.0 36.6 37.2 48.6 2.8 5.1 36.8 52.5 28.3 25.9 33.9 2.3 3.4 26.0 31.0 32.1 30.6 27.1 2.0 3.9 26.5 28.9 30.3 30.2 22.4 2.2 3.5 28.3 23.4 27.7 25.2 19.3 2.5 3.0 22.6 19.7 24.2 22.1 17.0 2.9 2.7 19.2 17.1 CY07 FY09# FY10 FY11E FY12E FY13E

July 29, 2011

11

HUL | 1QFY2012 Result Update

Research Team Tel: 022 - 3935 7800

E-mail: research@angelbroking.com

Website: www. angelbroking.com

Disclaimer
This document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investment decision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document should make such investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the companies referred to in this document (including the merits and risks involved), and should consult their own advisors to determine the merits and risks of such an investment. Angel Broking Limited, its affiliates, directors, its proprietary trading and investment businesses may, from time to time, make investment decisions that are inconsistent with or contradictory to the recommendations expressed herein. The views contained in this document are those of the analyst, and the company may or may not subscribe to all the views expressed within. Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions and trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's fundamentals. The information in this document has been printed on the basis of publicly available information, internal data and other reliable sources believed to be true, but we do not represent that it is accurate or complete and it should not be relied on as such, as this document is for general guidance only. Angel Broking Limited or any of its affiliates/ group companies shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report. Angel Broking Limited has not independently verified all the information contained within this document. Accordingly, we cannot testify, nor make any representation or warranty, express or implied, to the accuracy, contents or data contained within this document. While Angel Broking Limited endeavours to update on a reasonable basis the information discussed in this material, there may be regulatory, compliance, or other reasons that prevent us from doing so. This document is being supplied to you solely for your information, and its contents, information or data may not be reproduced, redistributed or passed on, directly or indirectly. Angel Broking Limited and its affiliates may seek to provide or have engaged in providing corporate finance, investment banking or other advisory services in a merger or specific transaction to the companies referred to in this report, as on the date of this report or in the past. Neither Angel Broking Limited, nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from or in connection with the use of this information. Note: Please refer to the important `Stock Holding Disclosure' report on the Angel website (Research Section). Also, please refer to the latest update on respective stocks for the disclosure status in respect of those stocks. Angel Broking Limited and its affiliates may have investment positions in the stocks recommended in this report.

Disclosure of Interest Statement 1. Analyst ownership of the stock 2. Angel and its Group companies ownership of the stock 3. Angel and its Group companies' Directors ownership of the stock 4. Broking relationship with company covered

HUL No No No No

Note: We have not considered any Exposure below ` 1 lakh for Angel, its Group companies and Directors.

Ratings (Returns) :

Buy (> 15%) Reduce (-5% to 15%)

Accumulate (5% to 15%) Sell (< -15%)

Neutral (-5 to 5%)

July 29, 2011

12