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HUL Q2 Review - Raw Material Tailwinds Ahead: Dolat Capital

HUL Q2 Review - Raw Material Tailwinds Ahead: Dolat Capital

HUL detergent brand Surf Excel at a supermarket in Mumbai. (Photographer. Santosh Verma/Bloomberg News.)
HUL detergent brand Surf Excel at a supermarket in Mumbai. (Photographer. Santosh Verma/Bloomberg News.)

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

Dolat Capital Report

Hindustan Unilever Ltd.’s revenues were in line in Q2 FY22 as the core business registered 11% sales growth with 4% underlying volume growth.

Despite very high base, food and refreshment division reported 7.2% revenue growth and 180 basis points expansion in Ebit margin – was a positive surprise.

Nutrition portfolio witnessed 85% completion in go-to-market integration versus 50% in Q1.

Increase in raw material prices and delayed/restrictive price pass on resulted in 140 bps contraction in gross margin.

However, better operating efficiency restricted fall in operating profit margin to 50 bps.

Raw material prices are already at peak and few commodities are witnessing correction from peak levels.

HUL is likely to benefit once the commodity price trend reverses as benefit pass on would be limited.

Click on the attachment to read the full report:

Dolat Capital HUL Q2FY22 Result Update.pdf

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