HUL's net profit up 4 percent in September 2021 quarter

The period witnessed an improvement in trading conditions, but remained challenging with unprecedented levels of input cost inflation and subdued consumer sentiments, said Sanjiv Mehta, Chairman of HUL.
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Hindustan Unilever (HUL), the country’s largest consumer goods company, on Tuesday reported a consolidated net profit of Rs 2,185 crore in the quarter ended September 2021, up 4 percent over the previous quarter. It was 10.6 percent higher than in the same quarter a year ago.

HUL’s stock price dipped 4 percent to Rs 2,546.45 on Tuesday compared to Nifty 50, which was down 0.3 percent.

The company’s total income in the second quarter of fiscal year 2022 grew 11.2 percent over the same period a year ago to Rs 13,099 crore. Its management attributed the growth to a better operating environment, led by increased vaccination and receding COVID-19 cases.

The mobility index and employment also showed signs of recovery, going back to the levels observed at the beginning of the year. HUL's consolidated total income rose 6.8 percent sequentially.

“The September quarter witnessed a sequential improvement in trading conditions, but remained challenging with unprecedented levels of input cost inflation and subdued consumer sentiments,” said Sanjiv Mehta, Chairman of HUL.

The rising cost of crude oil, palm oil and ocean freight are adding to the company’s expenses, it said in an investor presentation. The rural FMCG market growth, which drove the revenue in the past quarter, was dim.

“Calibrated price increases and laser sharp focus on savings has helped us protect our business model,” Mehta added.

The company recorded an EBITDA margin of 25 percent in the September 2021 quarter, gaining 70 basis points over the previous quarter.

HUL captured more than 15 percent of the demand digitally, with its Shikhar app and through e-commerce platforms, it said in the investor presentation.

“Through our ‘Re-Imagine HUL’ programme, we have further strengthened the digital capabilities across our organisation,” said Mehta. The programme aims to use technology and create data-led, machine-augmented models for enterprises.

The FMCG major is also tapping digital channels for its premium beauty brands such as Lakme, Simple, Love Beauty and Planet and Dermalogica.

Cosmetics brand Lakme has 2.3 million followers on its Instagram page. HUL says it is the highest across all beauty brands in India. Its D2C (Direct-To-Consumer) website has 2 million website visits per month. 30 percent of Lakme’s sales are done online.

Its largest segment—beauty and personal care—which is responsible for 40 percent share, grew by 10 percent year on year in revenue to cross Rs 5,000 crore in the quarter ended September 2021. The growth was led by skin care, colour cosmetics, and hair care.

The home care segment grew 15 percent year on year, driven by high double-digit growth in fabric wash. HUL had increased prices for fabrics and household care portfolios to partly offset the high inflation in input costs.

The foods and refreshment segment grew by 7 percent in the quarter ended September 2021 over a year ago. “Focus on market development in nutrition is yielding good results,” the company said, in a press statement.

Edited by Kunal Talgeri

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