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HLL tumbles on topline blues

Our Bureau

MUMBAI, April 16

DISAPPOINTMENT over the 10-per cent decline in Hindustan Lever Ltd's (HLL) topline was apparent on the bourses with the share dipping by over 5 per cent. On the BSE, the HLL stock dipped Rs 11.80 to Rs 211.15 with 20.64 lakh shares being traded. On the NSE, it dipped to Rs 211 from the previous close of Rs 223.70 with 29.97 lakh shares traded.

HLL announced a 9.9 per cent fall in net sales at Rs 2,380.66 crore but reported a 26 per cent rise in net profit at Rs 428.54 crore for the first quarter of 2002.

Most analysts maintained that despite the company citing lower sales in advance, the fall in sales was sharper than their expectations of a 3-4 per cent dip. "We do not expect anything major in the next two quarters. Bottomline growth cannot sustain unless topline improves," said an analyst.

According to Mr Nikhil Vora, Analyst, Alchemy Share & Stock Brokers (P) Ltd, HLL's numbers pave the way for a "greater uncertainty in the Indian consumer market". Rural and semi-urban demand for FMCG goods is not yet showing signs of picking up despite the fairly good kharif and rabi crop situation.

According to Mr Vora, the pricing power of the FMCG sector could wane. "Consumers are unlikely to accept price hikes without finding value for money in the products,'' he said.

The share price of HLL is expected to trade in the range of Rs 180-200 over the next few weeks, analysts maintained.

The company is not expected to show dramatic improvement in its performance over the second quarter.

"HLL should consolidate itself at these numbers. There is no possibility of a further decline in sales," said another analyst.

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