Manyal told CNBC-TV18, "Hindustan Unilever (HUL) results, two-three things were disappointing. 5 percent volume growth is certainly disappointing because from last almost 6-8 quarters we were seeing almost 9 percent plus kind of volume growth, the exception in the last quarter was 7 percent. So 5 percent is certainly disappointing."
He further added, "The second disappointment which is continued in this particular quarter is personal product growth which is around 13 percent which means the soaps and detergents has grown faster and personal care is not. Soaps and detergents certainly will not be sustainable because it is highly penetrated category and personal care growing at 13 percent which is certainly slower than what was our expectation. Secondly royalty 0.5 percent of the sales will be impacted in FY14 and subsequently 5.5 percent every year. Certainly this is also one of the pressures on the margin. Though HUL will be able to utilize some of the trademarks of Unilever, but I think certainly it will directly impact the margin in the near-term."
"Royalty part, 3.15 percent is implemented till March 2018. In FY14 the impact will be only 0.5 percent and 0.5 every year till FY18. So this 3.5 percent will come into to effect by FY18. So in the near-term 0.5 percent of the sales will be impacted and margins will be under pressure because of that."
"If they really want to sustain the 9 percent volume growth the growth has to come from the personal care business which has a low penetration level and certainly they need to increase their product line in the foods segment which is a low penetrated category, because sustainability in the soaps and detergent segment will not be there. It is highly penetrated category. This growth of 20 percent and double digit volume growth is there from last two quarters now, but certainly it will not be sustainable. So they have to concentrate on the foods business as well as on the personal care business."
"Even on FY15 front I think at Rs 500 which was earlier before the results the stock was trading at 30 times price-to-earnings multiples which certainly is expensive if we compare from the peers in the FMCG industry. We were always positive on ITC and we always preferred ITC over HUL. Certainly in the large cap segment ITC would be preferred over HUL. We were always positive on ITC and we always preferred ITC over HUL. Certainly in the large cap segment ITC would be preferred over HUL. We do not have buy on HUL as of now."
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