HUL Q3 Review - Volume Focus Over Margins Continues: ICICI Securities
Sachets of HUL’s Surf detergent are displayed at a store. (Photographer: Prashanth Vishwanathan/Bloomberg)

HUL Q3 Review - Volume Focus Over Margins Continues: ICICI Securities

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.

ICICI Securities Report

Hindustan Unilever Ltd.’s strong double-digit growth in health, hygiene and nutrition portfolio was encouraging to note in Q3 FY21. However, underlying volume growth of 4% was a tad underwhelming.

We note that this underperformance could reduce given the company’s focus on volume growth even at the expense of gross margins in the near-term.

We like the -

1. increase in consumer-relevant innovation intensity for hygiene related products (and more),

2. double-digit growth in nutrition business (albeit potentially at lower margins),

3. increase in assortment and outlet coverage (back to pre-Covid-19 levels) and

4. continuing plans to gain market share in tea from un-organised players by partially absorbing input cost inflation.

Click on the attachment to read the full report:

ICICI Securities HUL Q3FY21 Results Update.pdf

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