Hindustan Unilever Ltd. – Q2 Results

Introduction

Hindustan Unilever Limited (HUL), headquartered in Mumbai, is one of India’s largest and most recognised consumer goods companies. It is a subsidiary of Unilever, one of the world’s leading consumer goods companies. HUL’s history in India dates back to 1933, and it has since become a household name, providing a wide range of consumer goods to Indian consumers. HUL is known for its diverse product portfolio, which includes food and beverages, home and personal care products. Popular brands include, Surf, Lipton tea, Knorr, Lux, Pond’s, Rin, Dove, and Pepsodent.

Hindustan Unilever declared its Q2 performance results for the 3-month period that ended on 30 Sep, 2023. Here’s a quick summary of the key facts and figures.

Additional Read: Q2 Results Dashboard

Performance Highlights

• Turnover: ₹ 15,027 Cr
• Underlying Sales Growth: 4%
• Underlying Volume Growth: 2%
• EBITDA Margin: 24.6%
• Profit After Tax (PAT): ₹ 2,717 Cr
• Profit After Tax bei (before exception items): ₹ 2,668 cr, 12% growth YoY
• Interim Dividend Declared: ₹ 18 per share

With an underlying sales and volume growth close to 4% and 2% respectively, Hindustan Unilever results outperformed market estimates. Total revenue stood at ₹ 15,027 Cr as compared to ₹ 14,514 Cr in Q2 last year. The EBITDA margin was an impressive 24.6% which was 130 basis points higher than the same period last year. The PAT registered a 4% YoY growth (₹ 2,616 Cr on 30 Sep, 2023) and the PAT before exceptional items showed a double digit growth standing at 12% YoY. The variation in PAT(bei) and PAT percentages is mainly attributed to higher tax credits paid out in Q2 FY 22-23.

The earnings per share (EPS) for the period was ₹ 11.56 per equity share. Furthermore, to reward shareholders, the company has declared an interim dividend of ₹ 18 per share for the financial year ending 31 Mar, 2024, amounting to a total of ₹ 4,229 Cr. The record date has been set as 02 Nov, 2023.

For H1 2023-34, the total turnover showed a 5% YoY growth to reach ₹ 29,958 Cr. EBITDA of 24.1% for the first half of the financial year was 90 basis point more than the same period last year. Net profit of ₹ 5,189 Cr and PAT (bei) of ₹ 5,168 Cr were 6% and 11% higher than last year respectively.

Additional Read: HUL Share Price

Operations Highlights

• Home care segment grew at 3% YoY and accounted for 35% of the revenues – ₹ 5,312 Cr with a segmental margin of 19%.
• Beauty & Personal Care displayed a 4% growth when compared to the figures reported on 30 Sep, 2022 – ₹ 5,809 Cr, 38% of quarterly revenues with a segmental margin of 27%.
• Foods & Refreshment segment saw a 4% jump from the same quarter in the preceding financial year – ₹ 3,851 Cr, 25% of quarterly revenues with a segmental margin of 19%.
• Other segments contributed the remaining percentage of the overall revenue with an absolute figure of ₹ 304 Cr.

HUL Results: YoY Comparison

	Q2 FY23	Q2 FY24	YoY
Sales	₹ 14,514 Cr	₹ 15,027 Cr	4%
Total Income	₹ 14,866 Cr	₹ 15,559 Cr	4%
Total Expenses	₹ 11,647 Cr	₹ 11,923 Cr	2%
EBITDA	₹ 3,377 Cr	₹ 3,694 Cr	9%
EBITDA Margin	23.3%	24.6%	130 bps
EBIT	₹ 3,129 Cr	₹ 3,425 Cr	9%
Other Income (Net)	₹ 90 Cr	₹ 211 Cr	1%
Exceptional Items	– ₹ 28 Cr	– ₹ 5 Cr
PBT	₹ 3,191 Cr	₹ 3,631 Cr	14%
Tax	₹ 575 Cr	₹ 914 Cr
PAT bei	₹ 2,379 Cr	₹ 2,668 Cr	12%
Net Profit	₹ 2,616 Cr	₹ 2,717 Cr	4%
Total Comprehensive Income	₹ 2,563 Cr	₹ 2,722 Cr	6%

Future Outlook of Hindustan Unilever

Rohit Jawa, the company’s Chief Executive Officer and Managing Director offered the following insights for the near-term future:

• The festive season is expected to provide a boost to sales
• Performance in rural market is expected to remain slightly flat
• Industry-level competition to remain high
• Commodity prices may continue to be volatile
• If they do, then price growth may be marginally negative 
• Focused on maintaining EBITDA margins in a healthy range 

Source: https://www.hul.co.in/files/13910443-b40c-4a66-a631-dd01379369ab/results-presentation.pdf