FMCG giant Hindustan Unilever Limited(NSE:HUL) on Tuesday posted a 7.2% year-on-year(YoY) increase in net profit at Rs 1,881 crore compared to Rs 1,755 crore for the quarter(Q1) ended June 30. A dividend of Rs 9.5/share was announced by the board.
The numbers far exceeded market estimates and reaffirmed HUL’s position as the largest FMCG company in India. While the market was expecting a very muted or even negative growth rate due to the nation-wide lockdown, HUL managed to quickly reassess expenditure to respond to the situation.
| HUL | Q1 FY21 | Q4 FY20 | Q1 FY20 | QoQ% | YoY% |
| Total Income | 10,716 | 9,277 | 10,261 | 15.51% | 4.43% |
| Total expenditure | 8,187 | 7,227 | 7,705 | 13.28% | 6.26% |
| Net Profit | 1,881 | 1,519 | 1,755 | 23.83% | 7.18% |
Hindustan Unilever Limited is the parent company of many household and lifestyle brands with numerous products in over 20 consumer categories. Doing a quick survey of the FMCG products in your home would help you understand the deep bond Indian consumers share with the brand.
“In a challenging context of COVID-19 disrupting markets and operations, HUL delivered a resilient performance. Health, Hygiene and Nutrition constituting 80% of our portfolio delivered healthy mid-single digit domestic consumer growth. The integration of GSK-CH’s nutrition business with us was done seamlessly with good performance on both growth and margins,” the company said in its BSE filing.
Food & refreshment segment added most to the operating income, posting over 50% growth, while beauty and personal care was down 12%. A decrease in advertising and promotions expense 31.2% YoY from Rs 1,161 crore to Rs 797 crore boosted net profits. A strong rise in demand for hygiene products during the pandemic helped the company achieve double digit growth for the Lifebuoy label. Health, Hygiene and Nutrition constituting 80 percent of portfolio delivered healthy mid-single digit domestic consumer growth. The seamless integration of GlaxoSmithKline – Consumer Healthcare(GSK-HC) business helped the company maintain strong margins.
HUL stands in a very strong position to tide over the COVID-19 crisis. With its wide portfolio of consumer products, a decline in revenue from one product category is quickly compensated by increases in other segments. A strong balance sheet and consistent dividend payouts are sure to boost investor confidence.
Share prices ended marginally lower at Rs 2,316.65 down 0.61% on NSE after Tuesday’s trading session in anticipation of poor Q1 results. HUL is expected to perform well in tomorrow’s session after results beat Street expectations. You can find the complete Q1 result announcement here.
