- Despite the 8% growth in HUL’s profit, the company share price dipped in red and was trading a percent lower.
- The growth in its profit was led by the stellar growth in its foods and refreshment post the merger with GSK.
- HUL reports 1% volume growth, excluding GSK Consumer.
The growth in its profit was led by the stellar growth in its foods and refreshment post the merger with GSK. The volumes of the company rose 1% excluding the consumer businesses acquired from GlaxoSmithKline Plc and VWash, compared to the same quarter last year.
The company said, “Foods, tea and coffee sustained the high growth momentum and grew in double digits; our consumer focused activations and innovations are leveraging the 'in-home consumption' trend.”
“Health, Hygiene and Nutrition forming 80% of our portfolio grew in double digits,” it added.
The revenue numbers are better than the street expectation — which was pegging a 7% yoy growth in its profit.
“Our operations and service levels are now back to precovid levels and we have accelerated the pace of digitising our operations under the re-imagine HUL agenda,” said HUL chief and managing director Sanjiv Mehta.
The company has also declared an interim dividend of ₹14 per share.
The management believes that the worst is behind them and remains optimistic on demand recovery going ahead. “The economic outlook has improved given the various initiatives taken by the government and Reserve Bank of India. In our sector, rural markets have been resilient but the demand in urban India, especially in metropolitan cities has been muted. We believe that the worst is behind us and we are cautiously optimistic on demand recovery,” said Mehta.
Angel Broking has highlighted that excluding the impact of GSK merger, organic growth was 3% only. "We believe discretionary spends are still not back to pre-covid levels so these segments (Home care segment and beauty & personal care segment) have recorded a marginal drop in revenue. Although, mainly due to cost control management, all segment results improved compared to previous year. Company also declared an interim dividend ₹14 per share. From an investment perspective, we are bullish on HUL considering that discretionary spends are recovering back to pre-covid level, improving distribution and focus on premium products," Keshav Lahoti - Associate Equity Analyst, Angel Broking Ltd said.
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