Prabhudas upgrades HLL to out-performer

MUMBAI: Prabhudas Lilladher has upgraded its rating on Hindustan Unilever as out performer and expects the stock to touch target price of Rs 236. Hindustan Unilever reported strong set of numbers in its October-December 2007, better than Prabhudas��� expectations. Its revenue for the quarter grew by 16.8 per cent year on year to Rs 3,628.5 crore as against the brokerage expectation of 15 per cent on-year growth.

Quarterly profits grew by 15.3 per cent on-year to Rs 552.3 crore as against expectation of 10.8 per cent. The company recently launched Kissan Amaze, a brain food range, under its functional food platform. The brand is a range of nutritional drinks and snacks targeted at children, which helps in brain development. The products are currently being test marketed in Tamil Nadu and Karnataka.

Hindustan Unilever plans to extend reach of its water purifier, Pure It. The brand is now available across 210 towns covering 10 states. The company management believes that there is huge opportunity in this segment and expects a nationwide rollout of the product this year. At the market price of Rs 203, the stock trades at 21.5x CY08E and 18.3x CY09E earnings.