Higher royalty & dull results take sheen off HUL
The top 20 royalty paying companies now remit R3,601 crore, up from R1,196 crore five years ago. A study conducted by IIAS found that total royalty for 25 companies has increased to R3,635 crore in 2011-12, up from R1,528 crore in 2007-08. Maruti Suzuki has consistently paid the highest royalty and the R1,803 crore paid in FY12 accounts for 5.2% of its net sales.
HUL pays royalties on specific brands, where Unilever owns the patents and pays royalties on sales of products manufactured with technical inputs developed by Unilever. HUL had a turnover of R22,116 crore for the fiscal 2011-12. Over a two year period, the Sensex has returned 19.5% while HUL gained 25%.
“The pace of innovations and the scope of services have expanded over the years, and as a consequence, HUL is enjoying the benefits of an increasing stream of new products and innovations, backed by technology and knowhow from Unilever,” HUL said in a media statement.
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