Glenmark will manufacture VWash for HUL over the next one year after which the production arrangement would be reviewed, HUL's chief financial officer Srinivas Phatak said in a conference call on Monday.
VWash was launched by Glenmark in 2013 and has established itself as the market leader in the female intimate hygiene market, an emerging category.
Commenting on the acquisition, brokerage firm Motilal Oswal said, "The ‘VWash’ brand acquisition is part of HUVR’s Beauty and Personal Care strategy which involves adding new growth segments. The acquisition helps HUVR’s channel presence in chemist channel, health & beauty segment and in e-commerce."
About the 'Vwash' brand, analysts at the brokerage firm said," Intimate hygiene is a large growth opportunity for the future and penetration is in low-single-digit (<8%) even in urban India. The brand was launched in 2013 and is the leader in the intimate hygiene category. The gap between the brand and its competitors is also large. It has good gross margins in the category as well along with synergies with the HUVR distribution muscle."
The brokerage has a 'Buy' rating on the stock with the target of Rs 2,425, 30 per cent upside.
At 10 AM, the stock had pared some gains and was trading 4.5 per cent up at Rs 1,957.45 as compared to 0.8 per cent gain in the S&P BSE Sensex. Around 9.7 lakh shares have changed hands on the counter on the NSE and BSE combined. Glenmark Pharmaceuticals
also jumped 8.9 per cent to Rs 204.75 after the deal.