Hindustan Lever continued its southward journey on Wednesday, after the recovery led by its Q4 results proved to be short-lived.

The stock of the fast moving consumer goods major was down by 1% at Rs 164 on the BSE in mid-morning trades, near its day's low of Rs 163.85. It clocked a substantial volume of over 200,000 shares in the first one-and-half-hours of trading.

The HLL stock has witnessed a sustained fall in the last few sessions. The slide began in the run-up to the announcement of the company's Q4 results. From a recent high of Rs 179.85 on 24 January 2003, the stock shed 1.8% in two sessions ahead of the Q4 results to Rs 176.55 on 28 January 2003. On the day of the announcement of the results i.e. on 29 January 2003, the stock witnessed intense volatility amid higher volumes. The stock shed 2.1% on that day at Rs 172.80, only to recover from the day's low of Rs 169.50 that it hit just before the announcement of the results in the afternoon. It lost further ground in the last few sessions to the current Rs 164.

The HLL stock has been hit by selling pressure from institutional investors of late. But market men said that HLL will be a major beneficiary if there is exemption of dividend tax in the Union Budget for 2003-04 as the company is a consistent dividend payer.

Players are expecting a market-friendly Budget this time, with expectations of exemption on dividend tax, as recommended by the Kelkar committee on tax reforms. As per market buzz, brokerage firm Salomon Smith Barney offloaded the stock on behalf of an unknown foreign institutional investor. Life Insurance Corporation of India is believed to have bought the stock in the last few sessions.

HLL's quarterly results, in fact, have been in line with expectations. Analysts said the company may witness an improvement in top line in the coming quarters, albeit small. They feel the bottom-line growth will be impressive in the January-March 2003 quarter, largely due to the company's focus on power brands, increase in the profitability of the foods business etc.

For the full year ended 31 December 2002, HLL recorded a 7% growth in bottom-line to Rs 1,755.68 crore (Rs 17.55 billion), but posted a 7% drop in top-line to Rs 9,954.85 crore (Rs 99.54 billion). For the fourth quarter ended 31 December 2002, HLL registered a 7% growth in bottom-line to Rs 466.51 crore (Rs 4.66 billion) on a 2% decline in top-line to Rs 2,634.5 crore (Rs 26.34 billion). At the profit after tax but before extra-ordinary item level, the company has registered a 9% growth in net profit to Rs 542.84 crore (Rs 5.42 billion).

As on 31 December 2002, the promoters' holding in HLL was 51.6%, while the public, domestic institutions and FIIs held 21.4%, 13.4% and 12.83%, respectively.

BSE Code: 500696