scorecardHorlicks helps HUL clock a profit – but shareholders want more
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Horlicks helps HUL clock a profit – but shareholders want more

Horlicks helps HUL clock a profit – but shareholders want more
Stock Market3 min read
  • India’s largest consumer goods company HUL posted an increase in revenue for the June quarter, primarily due to the Horlicks boost from the GSK acquisition.
  • All but one of HUL’s segments posted a reduction in its revenue – only the Food & Refreshment segment posted a growth of 34%.
  • Shareholders, on the other hand, hinted that they want more than just a Horlicks boost – the share price of HUL took a knock on back of earnings, falling by 3.6%.
  • Check out the latest news and updates on Business Insider.
Such is the power of Horlicks – a 140-year old brand that has given a boost to the topline of Hindustan Unilever (HUL), turning a 7% fall in sales to a 7% increase. As a result, HUL posted a 52% jump in revenue in the food and refreshment segment in the June quarter.

However, even though Horlicks boosted HUL’s revenue, shareholders want more. In the first hour of trade today, HUL’s shares were down by 3%, signalling that shareholders are not happy with the June results.


In the run up to the earnings, HUL’s shares surged by 7.5%. However, since the earnings were released, the company’s shares have taken a beating, falling by as much as 3.6%.

Here’s how HUL performed in the June quarter

HUL is the largest consumer goods company in India, and the GSK acquisition might have saved it the blushes in the June quarter. Despite the lockdown impacting its business, HUL posted an increase of 7% in its revenues, and a 4.2% increase in its profit.

If the benefit from the GSK consumer business takeover is removed, HUL’s revenues would have shrunk 7%. Barring the food and refreshment segment, every other segment posted a fall in revenue.

Segment

Revenue (in crore)

Growth

Others

171

-36%

Beauty & Personal Care

4039

-12%

Home Care

3392

-2%

Food & Refreshment

2958

34%


Source: HUL

“Domestic Nutrition business performed well; immunity boosting Horlicks with added Zinc was launched in the quarter,” HUL said in a statement.

Other products drove HUL’s revenue down. “Ice creams, foods solutions and our vending businesses which are driven primarily by out of home consumption were massively impacted by the lockdown and closure of restaurants/eateries,” the company added.

Near-term uncertain, but HUL reassures its shareholders

Despite near-term outlook remaining uncertain, HUL tried to assuage its shareholders.

“While constraints continue due to restrictions in several parts of the country and the near-term demand outlook remains uncertain, we remain well positioned to drive competitive, profitable and responsible growth,” the company said.

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