Q1 Results: HUL Profit Meets Estimates As Sales Volumes Rise In June Quarter
Hindustan Unilever Ltd.’s profit met analyst estimates in the quarter ended June aided by double-digit growth in sales volumes.
Net profit of India’s largest fast-moving consumer goods manufacturer rose 19.2 percent from the year-ago period to Rs 1,529 crore, according to the company’s exchange filing. That’s in line with the Rs 1,540 crore estimated by analysts tracked by Bloomberg. Revenue rose 11 percent to Rs 9,487 crore, missing the estimated Rs 9,669 crore.
Sales volumes rose 12 percent year-on-year, also in line with estimates. This was the third consecutive quarter of double-digit sales growth for HUL, which owns popular brands such as Ponds, Surf XL, Kwality Wall’s, Vaseline, Lux, Lakme, CloseUp, etc.
The company expects a gradual improvement in demand and said it will continue to focus on innovations and market development. “Crude volatility and currency-led inflation are key risks going ahead,” Sanjiv Mehta, chairman and managing director at HUL, was quoted as saying in the press release accompanying the earnings filing.
On the operational front, HUL’s earnings before interest, tax, depreciation and amortisation rose 21 percent to Rs 2,251 crore while the operating margin expanded to 23.7 percent from 21.9 percent last year.
The company hiked product prices in the first quarter, but that won’t have a bearing on consumers, said Mehta in the press conference to announce June quarter earnings. “Even when there is inflation, the price of our products would be cushioned by the [price] reduction that took place after GST,” he explained.
The operations of the company have been “fairly stable” nearly a year after the implementation of the Goods and Services Tax, Chief Financial Officer Srinivas Phatak said. “However, there is still some working capital that needs to be unlocked,” he added.
Also read: GST: Taxman Blocks HUL’s Input Tax Credit
- Homecare revenue rose 3 percent year-on-year to Rs 3,146 crore
- Double-digit sales volume growth seen in homecare segment led by key brands such as Vim, Wheel and Surf
- Beauty and personal care revenue up 1 percent to Rs 4,407 crore.
- Sales in this segment also grew in double digits led by skin care, hair care and cosmetics
- Food revenue up 8 percent to Rs 1,785 crore. The quarter also saw the integration of HUL’s food and refreshment divisions.
Shares of the FMCG major have risen 23.1 percent in the first quarter compared to a 5.9 percent rise in the NSE Nifty 50 Index.