GICS Industry : Household Productsl Sub Industry : Household Products l Website : www.hul.co.

in

Hindustan Unilever Ltd
Key Stock Indicators
NSE Ticker : Bloomberg Ticker : Face value / Share: Div. Yield (%): HINDUNILVR HUVR:IN 1.0 2.3 CMP (as on 16 Feb 2011 Rs/Share) 52-weekrange up to 16 Feb 2011 (Rs)(H/L): Market Cap as on 16 Feb 2011 (Rs Mn): Enterprise Value as on 16 Feb 2011 (Rs Mn): Div. Yield (%): 0.0 275.9 325.7/219.4 601,927 581,666 Shares outstanding (mn) : Free Float (%) : Average daily volumes (12 months) : Beta (2 year) : 2181.7 48.0 2,257,081 0.6

Hindustan Unilever Limited (HUL) is a ~52% subsidiary of multinational fast-moving consuming goods (FMCG) company Unilever Plc. It was incorporated in 1933 and is a market leader in the FMCG market in India. The company is into manufacturing of soaps, detergents, shampoos, skin care products, toothpastes, deodorants, cosmetics, tea, coffee, packaged foods, ice cream and water purifiers. It has manufacturing plans at Barotiwala and Nalagarh in Himachal Pradesh, Khalilabad (Uttar Pradesh), Kochi (Kerala), Kolkata and Haldia (West Bengal), Mangalore and Mysore (Karnataka), Nasik, Mumbai and Pune (Maharashtra) and Goa, etc. The employee strength of HUL was around 15,000 as on March 31, 2010.

Key Financial Indicators
Revenue (Rs mn) EBITDA ma rgins (%) PAT (Rs mn) PAT ma rgins (%) Gea ring (x) EPS (Rs /s ha re) PE (x) P/BV (x) RoCE (%) RoE (%) EV/EBITDA (x)
n.m. : Not meaningful

KEY HIGHLIGHTS
Market leader in FMCG sector HUL is the largest company by market share in the FMCG segment in India. The company leads in the soaps and detergents markets, where it commands market shares of 46% and 36%, respectively as of June 2009. In the personal care segment, the company is a clear market leader with products present at all price points. HUL has a market share of 49% and 45%, respectively, in the skin care and shampoo segment. Its “Bru” brand has a strong position in the coffee segment, where HUL has a 42% market share. Strong brands portfolio HUL’s brands are classified into the food, home care, personal care, water, nutrition, health and hygiene and beauty segments. Food brands include “Anna Purna”, “Red Label”, “Brooke Bond Taaza”, “Brooke Bond”, “Taj Mahal”, “Kissan”, “Kwality Walls”, etc. Under home care, it has brands like “Rin”, “Vim”, “Domex”, “Surf Excel”, “Active Wheel”, etc. The personal care segment has brands like “Ponds”, “Clinic Plus”, “Dove”, “Lakme Fruit Blast”, “Hamam”, “Axe”, “Close up”, “Fair & Lovely”, etc. HUL sells water purifiers and has 2 types of water purifiers, namely “Pureit-Blue” and “Pureit-Maroon”. The nutrition category has brands such as “Kwality Walls” fruit ice cream and “Soupy” noodles. Under the health and hygiene category, brands include “Lifebuoy”. HUL products are available at all price points i.e. the company offers premium, mid-priced and mass products. In FY10, HUL launched “Brooke Bond SehatMand”, which is a tea containing vitamins.

Dec-07 Mar-09 Mar-10 140,977.4 208,609.1 180,403.5 14.9 14.9 15.8 18,348.0 25,099.3 21,646.1 13.0 12.0 12.0 0.1 0.2 8.4 9.2 9.9 25.4 25.8 27.8 31.6 25.0 22.9 116.4 137.4 124.9 89.8 113.3 92.1 22.0 16.2 20.4

Shareholding (As on Dec 31,2010)
DII 13% FII 17% Others 18%

KEY RISKS
•Stiff competition from other players in the industry •Slower market growth
(index) 160

Promoter 52%

Indexed price chart
('000) 12000 10000 8000 6000 4000 2000 0 Nov-10 Apr-10 Mar-10 May-10 Dec-10 Aug-10 Feb-10 Sep-10 Jun-10 Oct-10 Jul-10 Jan-11

Stock Performances vis-à-vis market
Returns (%) YTD HINDUNILVR NIFTY
Note: 1) YTD returns are since Apr 01, 2010 to Feb 16, 2011. 2) 1-m, 3-m and 12-m returns are up to Feb 16, 2011.

140 120 100 80 60 40 20 0

1-m -9 -3

3-m -8 -10

12-m 16 14

20 4

Volumes (RHS)

HINDUNILVR

NIFTY

CRISIL COMPANY REPORT | 1

cosmetics.1 12.2 68. employee costs and other expenses by 336 bps.3 Mar-10 180.609.3 21. The FMCG environment in India and overseas is competition intensive and companies need to focus on branding.4 Dabur India Ltd Mar-10 34. This is resulting in a rise in disposable incomes levels in the rural economy and consequently in demand for FMCGs.24 bn to its parent company.3 2.250 tonnes per annum (TPA).1 5. Product innovations help to gain market share while advertising and sales promotions create visibility for the product.6 15.667 TPA. product development.1 15. distribution and innovation to ensure their survival. CRISIL COMPANY REPORT | 2 .575. tea. deodorants.1 14.6 8.3 14. Revenue breakup for FY10 was: Ice creams (1%).1 116. detergents 313.9 92. Unilever Plc.000 stockists and access to ~ 6.4 113.3 million (mn) retail outlets and access to ~ 166 mn households in India.126.0 13.9 16. The company exports to Europe. ice cream.6 19. beverages (12%).9 27.8 21. respectively.553 TPA.5 40.1 30. HUL paid royalty of Rs 1.8 9.6 bn in FY09 (15 months ended March 2009). skin care. The rural economy is largely agrarian directly or indirectly dependent on agriculture as a means of livelihood with relatively lower levels of penetration and a large unorganized sector.0 8. It was incorporated in 1933 and is a market leader in the Indian FMCG market.646.0 124. India's Fast Moving Consumer Goods (FMCG) sector has continued to show robust growth.1 11. packaged foods. the USA and Emirates.8 55.099. The company is into manufacturing of soaps.495.8 21. toothpastes.8 0.5 15.3 12. Over 300 million people are expected to move up from the category of rural poor to rural lower middle class between 2005 and 2025 and rural consumption levels are expected to rise to the current levels in urban India by 2017. 32 bps and 25 bps. The urban segment is characterized by high penetration levels and high spending propensity of the urban resident. hair care and skin care products.4 17. foods (4%).4 14.8 4.3 28.5 44. The implementation of Goods and Services Tax (GST) and opening of Foreign Direct Investment (FDI) are expected to fuel the growth further and raise the industry size to USD 47 billion by 2013 and USD 95 billion by 2018 (Source: IBEF.4 19. COMPETITIVE POSITION Peer Comparison Revenue (Rs mn) EBITDA ma rgins (%) PAT (Rs mn) PAT ma rgins (%) Gea ring (x) EPS (Rs /s ha re) PE (x) P/BV (x) RoCE (%) RoE (%) EV/EBITDA (x) n. The installed capacity of various products as of March 2010 was: Soaps 170.9 18. personal products 128.0 58.024.2 137. for FY10.6 bn.977.1 The top-line of the company stood at Rs 180.1 12.403. perfumery & cosmetic products 55 million TPA.3 3.6 15.3 58.395.Hindustan Unilever Ltd BACKGROUND Hindustan Unilever Limited (HUL) is a ~52% subsidiary of Unilever Plc.3 9. Operating margin increased by 90 basis points (bps) in FY10 over FY09. shampoos.646. against FY10’s 12-month period to March 2010.0 18.358 TPA. others (2%).Technopak Report).4 0. lower deferred tax assets and higher income taxes as compared with FY09. FICCI .9 26.347 TPA. coffee.5 15.4 bn in FY10.4 0. Note: Figures for FY09 and FY10 are not comparable as FY09 figures are for a 15month period ended March 2009.7 0. HUL has ~4. It is poised to reach a turnover of about USD 43 billion by 2013 and USD 74 billion by 2018.9 25.1 0.1 -3.m: Not meaningful Hindustan Unilever Ltd Mar-10 180. This includes investments in development of infrastructure and schemes for job creation (such as NREGA).0 11.9 124. processed foods 1. Revenue growth Per cent INDUSTRY PROFILE FMCG Despite the global economic slowdown experienced over the last year.4 89.6 FINANCIAL PROFILE Decrease in top-line and PAT for FY10 Key Financial Indicators Units Revenue Rs mi ll ion Rs mi ll ion Per cent Per cent Per cent Times Per cent Per cent EBITDA ma rgins Per cent PAT PAT ma rgins EBITDA growth PAT growth Gea ring RoCE RoE Dec-07 140.3 34.1 20.5 14.403. oral care.9 92. instant tea & coffee 4. The demand is increasing by 18% in the rural areas and by 11% in urban areas. compared with Rs 208.8 22.6 Godrej Consumer Products Ltd Mar-10 20. detergents. detergents. PAT for FY10 came in at Rs 21. PAT for FY10 was affected by a ~140% increase in interest and finance charges. The FMCG segment includes products like soaps. and water purifiers.8 Mar-09 208.4 19.4 56. due to decrease in raw material costs.458. exports (6%).5 0.1 7.0 9. India's FMCG market can be divided into two segments urban and rural. soaps and detergents (47%). personal products (28%).2 2. In the recent past the government has focused upon development in the rural sector.348.4 Marico Ltd Mar-10 26.

504.741.392.9 2.0 0.7 12.756.5 96.0 15.1 14.5 6.9 16.1 7.328.9 0.1 31.919.9 0.624.566.5 2.358.133.0 16. tax) Others (incl extraordinaries) 6.876.5 Mar-10 2.2 12.8 9.121.2 15.638.2 55.530.641.661.2 0.9 -1.521.0 65.2 65.895.396.3 100.1 15.984.087.177.9 21.1 Sep-10 3 48.367.624.6 14.6 6.4 17.2 -3.060.099.1 12.1 100.2 18.645.4 108.232.6 34.8 4.7 5.7 -5.123.235.9 180.0 107.8 140.5 113.8 89.2 -20.319.0 321.641.0 5.2 100.4 -5.6 27.375.3 92.4 36.512.228.487.3 394.5 1.0 65.2 -15.415.609.541.713.8 1.9 1.646.541.976.9 7.5 14.060.7 0.4 13.3 25.8 23.8 2.1 264.3 22.491.2 81.4 638.9 2.4 57.396.4 Mar-09 204.934.1 5.1 100.0 44.2 16.3 -2.0 15.055.8 264.1 15.7 7.999.9 34.9 1.337.2 -9.406.021.8 -4.534.1 17.4 20.181.237.5 12.4 1.514.482.7 24.7 % of Rev Dec-10 % of Rev 9 149.0 -6.1 8.9 0.419.3 137.0 2179.384.0 2181.3 14.991.973.3 100. of shares (Mn No.5 9.195.9 Dec-07 2.9 110 Dec-07 138.0 6.9 17.9 9.0 2177.8 116.143.6 18.2 117.6 12.1 11.179.7 9.0 1.014.6 563.624.881.3 18.7 14.4 1.9 68.800.032.1 1.8 -19.3 3.1 7.652.0 1.1 8.0 22.4 16.4 0.4 18.047.652.5 1.482.8 -766.341.208.6 65.1 14.5 0.0 % of Rev CRISIL COMPANY REPORT | 3 .8 1.0 92.4 0.5 208.919.6 Dec-09 9 134.259.564.5 0.1 79.4 21.6 15.2 13.053.403.1 -33.8 92.060.8 4.8 6.256.3 43.0 1.6 25.021.414.021.0 1.4 14.7 12.1 25.8 30.0 14.767.186.0 108.021.0 -6.7 -3.123.746.872.494.1 6.715.6 12.4 25.2 28.310.977.2 -14.010.0 13.3 12.9 0.1 1.9 0.009.0 2.0 1.609.9 14.2 20.647.9 21.2 % of Rev Dec-09 % of Rev 3 46.6 15.4 164.053.244.4 Mar-10 28.0 0.6 11.067.263.419.7 Cash flow from financing activities Change in cash position Opening cash Closing cash -29.7 11.6 22.3 20.641.9 123 Mar-10 8.4 Mar-09 30.8 20.999.3 8.450.6 Cash flow from investing activities Equity raised/(repaid) Debt raised/(repaid) Dividend (incl.3 8.1 24.0 2.7 0.278.9 450.5 12.649.916.139.9 19.5 38.3 -2.) Earnings per share (EPS) Cash flow (Rs million ) Pre-tax profit Total tax paid Depreciation Change in working capital Cash flow from operating activities Capital Expenditure Investments and others Balance sheet (Rs million ) Equity share capital Reserves and surplus Tangible net worth Deferred tax liablity:|asset| Long-term debt Short-term-debt Total debt Current liabilities Total provisions Total liabilities Gross block Net fixed assets Investments Current assets Receivables Inventories Cash Total assets Ratio Dec-07 21.368.9 -3.7 2.0 1.8 83 Mar-09 18.1 14.8 QUARTERLY RESULTS Profit and loss account (Rs million) No of Months Revenue EBITDA Interes t Depreci a tion PBT PAT Dec-10 3 52.1 6.0 5.231.1 0.4 0.452.1 -3.3 4.4 53.0 4.6 -23.0 17.341.2 20.8 81.8 14.2 Mar-10 177.605.7 22.550.1 1.020.0 -2.4 0.0 17.3 2.9 18.231.4 20.132.664.9 -16.099.4 Mar-09 2.1 -2.291.0 15.5 8.8 15.535.8 1.016.9 22.065.1 124.0 0.084.Hindustan Unilever Ltd ANNUAL RESULTS Income Statement (Rs million ) Net Sales Operating Income EBITDA EBITDA Margin Depreciation Interest Other Income PBT PAT PAT Margin No.7 553.8 Revenue growth (%) EBITDA growth(%) PAT growth(%) EBITDA margins(%) Tax rate (%) PAT margins (%) Dividend payout (%) Dividend per share (Rs) BV (Rs) Return on Equity (%) Return on capital employed (%) Gearing (x) Interest coverage (x) Debt/EBITDA (x) Asset turnover (x) Current ratio (x) Gross current assets (days) Dec-07 11.665.4 26.5 12.348.5 28.8 5.324.5 9.867.583.7 9.322.4 0.044.

9 17.000 50.2 DII 14.0 52. it should not be relied upon as such.000 40.0 17.) Gopa l Vitta l (Mr.000 6. CRISIL especially states that.5 1 0. This report is for the personal information only of the authorised recipient in India only.2 12. legal. for any purpose.5 0 Dec-08 EPS Per cent 20 18 16 14 12 10 8 6 4 2 0 Jun-08 Mar-08 Dec-09 Mar-10 Dec-10 Sep-09 Sep-10 Jun-10 Movement in operating and net margins Dec-08 Dec-09 Sep-08 Sep-09 Jun-09 Mar-10 Mar-10 Sep-08 Jun-08 Mar-08 Mar-09 Jun-09 OPM Mar-09 Shareholding Pattern (Per cent) Mar 2010 Jun 2010 Promoter 52. For information please contact 'Client Servicing' at +91-22-33423561. This report should not be reproduced or redistributed or communicated directly or indirectly in any form to any other person – especially outside India or published or copied in whole or in part.) Nitin Pa ra njpe (Mr.com.5 12.000 5.000 30. Nothing in this report constitutes investment.000 0 Dec-08 Dec-09 Mar-08 Mar-09 Mar-10 Dec-10 Sep-08 Sep-09 Sep-10 Jun-08 Jun-09 Jun-10 10 5 0 Quarterly sales & y-o-y growth Per cent 25 20 15 Rs mn 7.000 3.7 17.5 2 1.) Ra ma dora i Venka tra ma n Pra deep Ba nerjee (Mr.) Sri dha r Ra ma murthy (Mr.0 FII 14. accounting or tax advice or any solicitation.000 10.) Non-Executive Di rector Non-Executive Di rector Non-Executive Di rector Non-Executive Di rector Wholetime Di rector Ma na gi ng Di rector Director Director Additional Disclosure This report has been sponsored by NSE .) Adi tya Na ra ya n (Mr.0 17. to the subscribers / users of this report. or via e-mail: clientservicing@crisil.Hindustan Unilever Ltd FOCUS CHARTS & TABLES Rs mn 60. Disclaimer This report is based on data publicly available or from sources considered reliable.000 2. The data / report is subject to change without any prior notice.000 0 Quarterly PAT & y-o-y growth Per cent 60 50 40 30 20 10 0 -10 -20 -30 Dec-10 Dec-10 Sep-10 Sep-10 Dec-08 Dec-09 Sep-08 Sep-09 Jun-08 Jun-09 Mar-08 Mar-09 Sales Sales growth y-o-y (RHS) Net Profit Net profit growth y-o-y (RHS) Rs/share 3. it has no financial liability whatsoever. Opinions expressed herein are our current opinions as on the date of this report.Investor Protection Fund Trust (NSEIPFT).) Non-Executive Cha i rma n Ra ghuna th Ana nt Ma s hel ka r (Dr.9 Dec 2010 52.) Deepa k Sha ntil a l Pa rekh (Mr. CRISIL is not responsible for any errors and especially states that it has no financial liability whatsoever to the subscribers / users / transmitters / distributors of this report.4 18.5 16. CRISIL Ltd.000 20.4 Others 19.000 1.5 3 2. (CRISIL) does not represent that it is accurate or complete and hence.000 4. whatsoever. The subscriber / user assume the entire risk of any use made of this data / report.4 Sep 2010 52.1 13. CRISIL COMPANY REPORT | 4 Jun-10 Jun-10 NPM .8 Board of Directors Director Name Designation Ha ri s h Ma ngha n Ma nwa ni (Mr.