Share:

Hindustan Unilever Limited (HUL) published its first quarter results for the financial year 2021-22. The FMCG major posted a growth of 10% in its net profit on a year-on-year (y-o-y) basis. The profit, at Rs 2,061 crore, was in line with market expectations. This figure is, however, down 3.8% from the net profit reported in the previous quarter (Q4 FY21). 

On the revenue front, the company posted a year-on-year growth of 13% and a decline of 1.8% q-o-q as the revenue from operations stood at Rs 11,915 crores. This comes despite product price hikes the company undertook in the quarter. 

Even as HUL’s EBITDA rose by 8% to Rs 2,847 crore in Q1 FY22, operating margins continued to suffer on account of higher commodity prices.

Hits

  1. Net profit for Q1 FY22 came in Rs 2,061 crore against the Rs 1,881 crores reported in Q1 FY21 – a growth of 9.56%
  2. Revenue grew 13% y-o-y to Rs 11,915 crore in Q1 FY22
  3. EBITDA signified 8% growth at Rs 2,874 crore, against the last year’s Rs 2,644 crore
  4. Domestic consumer growth came in 12% on a y-o-y basis
  5. Sales volumes grew by 9%

Misses 

  1. Operating profit margins shrunk 110 basis points y-o-y. The EBITDA margin was reported at 24% in Q1 FY22.
  2. Compared to the net profit of Rs 2,143 crore recorded in the last quarter, the net profit declined by 3.8%.
  3. Revenue from operations declined on a Quarter-to-quarter basis by 1.8%

Management Commentary

The Chairman and MD of the company, Mr. Sanjiv Mehta, remarked that the quarterly performance of the company was resilient in the face of challenges. It shows the company’s capability, the agility of its operations and the strength of its portfolio. He also said that the company is optimistic about growth in the demand of its products and it believes in achieving growth linked to volume. 

Performance Of Different Verticals

As per the company’s records, all the three main divisions of Hindustan Unilever Limited delivered good performance. They posted growth in double digits. The performances were as follows –

  • Home care segment – a growth of 12%
  • Beauty and personal care segment – a growth of 13%
  • Foods and refreshments segment – a growth of 12%

In Q1, the company introduced many new products which contributed to the growth rates of the different verticals.

Company In News

  • Hindustan Unilever Limited (HUL) launched a one-of-a-kind in-store vending machine for its home care products that will enable customers to refill bottles of Surf Excel, Comfort and Vim as the packaged consumer goods company seeks to lower plastic usage across the board.
  • The Company is set to scale up the online reach of several premium brands through standalone branded sites as well as its multi-brand shopping platform UShop.
  • Ms.Geetika Mehta resigned as General Manager Home & Hygiene, India & Regional Brand Director, South Asia, HUL Ltd, to join Hershey India as Managing Director.

What Does The Result Mean For The Investor?

Hindustan Unilever is a leading FMCG brand in India. The quarterly results have been favourable as both the profits and the revenue of the company have grown. Despite the pandemic situation and state-wise lockdowns, the company has managed to earn decent profit margins. Though the growth has been subdued compared to the last quarter, the demand for FMCG products would likely keep the company in a leading market position. With new product launches in different verticals, the company is also expanding its portfolio and hopes to increase its penetration in the Indian FMCG market. Investors can, therefore, consider investing in HUL stocks if it suits their investment strategy and has the risk appetite for the same. We recommend you do your research and reach out to a qualified advisor before making any investment in the stock market.

Share: