HUL reported a 13.6% increase in consolidated net profit to ₹2,381 crore in the first quarter of 2022-23.- Its revenues grew 19.5% to ₹14,331 crore from ₹11,996 crore in the comparative period.
- Volumes surged 6% against analyst expectations of 4%, but its margins remained stressed.
- The home care segment reported a much higher growth on a sequential basis when compared to personal care.
The company’s revenues too went up 19.5% to ₹14,331 crore from ₹11,996 crore in the comparative period, even as most analysts predicted a 14% growth.
“In an environment which remains challenging, marked by unprecedented inflation and consequential impact on consumption, we have delivered yet another quarter of robust topline and bottom-line performance,”
Volumes too surged 6% against expectations of 4%, possibly on a low-base effect. However, its EBITDA margins fell by 1.1%, as compared to last year. The company said that in spite of the unprecedented inflation in input costs, it’s still at 23.2%.
HUL’s home care segment remained its best performer with a 30% growth thanks to fabric wash and household care. “Calibrated price increases were taken across fabric wash and household care portfolios as input costs continue to inflate at significantly high levels,” the company said.
Its foods and refreshment business grew 9% during the quarter thanks to solid performance in ice-cream, coffee, jams and food solutions.
“Ice cream had a very strong quarter broad based across brands and formats taking it significantly ahead of pre-Covid levels,” the company said. This segment has taken a beating during the pandemic years – making Q1FY23 the first disruption-free quarter they have had in two years.
However, the food segment was the only one to witness a profit decline on both yearly and sequential basis, falling 4% and 19% respectively.
“Skin Care and Color Cosmetics delivered strong YoY growth on a soft base. Premium portfolio in Skin Care performed well and is significantly ahead of pre-Covid levels. Calibrated pricing actions were taken across the portfolio to offset the impact of record inflation in input costs," HUL said in a press release.
Source: Company reports
“In Q1FY23, we expect HUL to clock volume growth of 3% YoY, largely due to a favourable base (Q1FY22 grew 9%, Q1FY21 dipped 8%). So we expect 15% revenue growth YoY in Q1FY23. We expect margins, however, to compress both QoQ and YoY,” Edelweiss had said in an earnings preview.
ICICI Direct had estimated a revenue growth of 14.2%, and volume growth of 4%.
Here’s how HUL’s segments fared in the first quarter of 2022-23.
Source: Company reports
The company also touched upon how the elevated prices of inputs and crude derivatives could result in an increase in expenses in the next quarter, but also said margins could recover by the end of 2022.
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