Motilal Oswal: HUL’s Scale Benefits And GSK Drive Margin Beat In Challenging Quarter
Bottles of Hindustan Unilever Ltd. Dove shampoo, right, are displayed at a store in Mumbai, India,(Photographer Kuni Takahashi/Bloomberg)

Motilal Oswal: HUL’s Scale Benefits And GSK Drive Margin Beat In Challenging Quarter

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

Motilal Oswal Report

Hindustan Unilever’s net sales grew 4.4% YoY to Rs 105.6 billion in Q1 FY21 (estimate Rs 100.1 billion). Ebitda edged down 0.1% YoY to Rs 26.4 billion (estimate 10.3% decline to Rs 23.7 billion), and profit before tax de-grew 1.1% YoY to Rs 25.3 billion (estimate Rs 23.2 billion).

On the other hand profit after tax was up 7% YoY to Rs 18.7 billion (est.: Rs 17.2 billion). Gross margins stood at 51.8% (220 basis points contraction YoY), while Ebitda margins contracted by 110 basis points YoY to 25%.

HUL’s reported 5% beat on sales and approximately 10% beat on Ebitda and PAT versus our estimates. The outlook is gradually improving, with the discretionary part of the portfolio (15% of sales) gradually seeing recovery.

In a period of relative normalcy, HUL (as has been the case in recent years) is likely to report superior earnings growth, which has led us to maintain a Buy rating.

Click on the attachment to read the full report:

Motilal Oswal HUL Q! Result Update.pdf

DISCLAIMER

This report is authored by an external party. BloombergQuint does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the brokerage and do not represent the views of BloombergQuint.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.