HUL fourth-quarter volume growth down 7%, profit falls 1%, India sales slide 9% ⁠— as COVID-19 strikes India’s largest consumer firm

COVID-19 lockdown hits HUL where it hurts the most

With the supply chain impacted due to the coronavirus lockdown across the country, overall revenue has been affected on expected lines. “Demand patterns are changing, and we are likely to see an upswing in categories like health, hygiene and nutrition. In the near term, we are also likely to see some adverse impact on discretionary categories and out of home channel,” the company statement said.

Earlier on April 23, Unilever withdrew its full year forecast and had said that it cannot assess the impact of coronavirus on its business.

Many of HUL products come under essentials along with LifeBuoy sanitizers and hand wash in its brands, however that wasn’t expected to help the company. “High stocking up will not compensate for the soft demand for a long period. HUL has ramped up supply for soaps and sanitizers for a while now since the outbreak in China. People are, however, hoarding these products to a very large extent and hence it is difficult to meet demand,” an Edelweiss estimate had said earlier.

The biggest food company in India

With its merger with Glaxosmithkline Consumer Healthcare (GSK), Hindustan Unilever became the biggest food company in India. According to reports, GSK is also planning to sell 5.7% stake in HUL worth $3.7 billion. Through the merger HUL acquired Horlicks from GSK for ₹30.5 billion.

However, after the deal was sealed, GSK has decided to dump the $3.9 billion worth HUL shares that it received as part of the deal. The expected flooding of shares in the market from GSK also took the HUL stock down in trade three days in a row, ahead of today’s earnings report.

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