HUL Q2 Review - In-Line Results; Mix Improvement On Track: Motilal Oswal
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Motilal Oswal Report
Hindustan Unilever Ltd.’s Q2 FY22 results were in line with our estimates.
While domestic volume growth was weaker than expected at 4% for the quarter, strong realisation growth actually led to a small beat on sales.
While commodity costs remain elevated, we believe mix improvement would lead to continued sequential margin improvement.
HUL’s share of the discretionary and out-of-home portfolios (~15% of sales) is higher versus peers.
Moreover, these businesses have much higher margins than the rest of the portfolio. As a result, the earnings growth outlook from H2 FY22 is incrementally better versus peers.
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