HUL’s Q2 net profit grows 20% to ₹2,616 cr; says it’s cautiously optimistic in the near-term

• HUL’s margin has been hit in the quarter due to commodity inflation, as predicted by analysts.
• The FMCG giant said that it’s ‘cautiously optimistic in the near-term’.
• Shares of HUL closed 1.99% higher on Friday at ₹2,652 on expectations of strong quarterly earnings.
• The company declared an interim dividend of ₹17 per share.

The largest FMCG player Hindustan Unilever’s standalone net profit grew by 19.6% to ₹2,616 crore for the September quarter, from ₹2,187 crore in the same quarter last year.

Revenue from operations of the company rose nearly 16% on year to ₹14,751 crore.

“Growth was significantly ahead of the market with more than 75% of the business winning value and volume market shares. EBITDA margin at 23.3% remained healthy despite unprecedented inflationary headwinds,” said the company in an exchange statement.

HUL’s margin has been hit in the second quarter due to commodity inflation, as analysts had predicted. Its EBIDTA margins for the quarter were at 23.2% down from 24.6% reported in the same quarter last year.

Further, the FMCG giant remains cautious of inflation impacting the demand environment and says it is ‘cautiously optimistic in the near-term’.

“Demand environment remains challenging with inflation impacting consumption. However, with softening in some commodities and monetary/ fiscal measures taken by the government, we are cautiously optimistic in the near-term. In this scenario, we will manage our business with agility, continue to grow our consumer franchise whilst maintaining our margins in a healthy range,” said Sanjiv Mehta, CEO and MF at Hindustan Unilever.

“We remain confident of the medium to long term potential of the Indian FMCG sector and HUL’s ability to deliver a consistent, competitive, profitable and responsible growth,” he added.
The company has declared an interim dividend of ₹17 per share.

Shares of HUL closed 1.99% higher on Friday at ₹2,652 on expectations of strong quarterly earnings.

Double digit performance in home care, beauty segment
During the second quarter of the fiscal year, the company delivered 34% growth in the home care segment. Both fabric wash and household care grew in high double-digits with all parts of the portfolio performing well.

Surf Excel Matic Power Concentrate and Comfort Sweet Dreams were launched during the quarter.

Beauty and personal care space grew 11% led by outperformance in the premium portfolio like Lux, Dove and Pears. Its hair care segment strengthened its market leadership, with strong broad-based performance, the company said.

Meanwhile, foods and refreshments which includes brands like Knorr, Kissan, BRU, Kwality Wall’s grew 4% driven by solid performance in foods, coffee and ice-cream.

Tea business’ volumes grew in mid-single digit while turnover declined marginally due to price cuts. Coffee continues to perform well delivering double-digit growth. Health Food Drinks continued to gain market share and penetration on the back of focused market development actions.

Horlicks seeded new formats Nutri Gummies and Diabetes Gummies. Kwality Wall’s launched new flavours and Kissan launched Hazelnut Choco Peanut Butter.

SEE ALSO: Rishi Sunak may get a second chance to run for UK’s premiership: Here’s all you need to know about him
If you are looking to add sparkle to your portfolio this Diwali, here are ten stocks for Samvat 2079