Hindustan Unilever Ltd (HUL) on Thursday posted fiscal first quarter profit at Rs 2,556 crore, up 6.9 per cent in comparison to Rs 2,391 crore in the corresponding quarter of last year, missing estimates. HUL posted the profit growth during Q1 on a gradual recovery in the FMCG industry despite operating in a challenging environment. It clocked a total income of Rs 15,679 crore, up 6.2 per cent as against Rs 14,757 crore during the first quarter of FY23. The total expenses during the quarter was at Rs 12,167 crore. According to CNBC TV18, HUL was expected to post the first quarter profit at Rs 2,620 crore and revenue at Rs 15,450 crore.
The gross margins in the first quarter expanded by 256 bps YoY while the EBITDA grew by 8.4 per cent on-year to Rs 3,520 crore. “FMCG markets are recovering gradually although the operating environment remains challenging. In this context we have delivered a resilient and competitive performance whilst stepping up our EBITDA margin. In the near-term, FMCG industry will continue to witness rebalancing of price-volume growth equations and a gradual recovery in consumer demand,” said Rohit Jawa, CEO and Managing Director, HUL.
“We remain focused on driving our long-term strategic priorities including market development and building distinctive capabilities for the future. I am confident of the medium to long term prospects of the Indian FMCG sector and HUL’s ability to deliver a consistent, competitive, profitable and responsible growth,” he added.
HUL’s Q1FY24 performance across business verticals
Home Care: The home care revenues grew by 10 per cent to reach Rs 5,421 crore from Rs4,930 crore in the first quarter of last year. The margins expanded by 64 bps on-year to 18.3 per cent. Volume growth for the segment hovered in mid-single digit range while Fabric Wash and Household Care grew in double digits led by market development actions and premiumization.
Beauty & Personal Care: The beauty and personal care segment posted a revenue of Rs 5,668 crore, up 4.4 per cent on-year while margins contracted by 2 bps YoY. Skin care and colour cosmetics grew double digit on the back of strong performance in the premium portfolio. Hair care delivered mid-single digit UVG led by Tresemme, Indulekha and Clinic Plus. Skin Cleansing had a modest volume-led growth with Lux and Hamam continuing to outperform. HUL also took price reductions in its soap portfolio in the quarter. Oral Care delivered strong double-digit growth.
Foods & Refreshment: The segment posted quarter revenue at Rs 3,797 crore, up 4.7 per cent on-year, with near flat UVG. Tea saw modest volume growth as consumers downgraded due to higher inflation in premium teas. Foods grew in mid-single digits led by strong performance in Ketchup and Food Solutions. Ice Cream grew in mid-single digits on a high base.
Talking about the quarter performance by HUL, Amnish Aggarwal, Head of Research, Prabhudas Lilladher, said, “Volumes were a miss on our/street estimates. However, rural markets have seen volume growth (on a low base). The quarter saw sequential margin improvement with inflation moderating across most commodities (ex-tea & coffee) which was reinvested in A&P to help drive demand. Pricing element has reduced to 3 per cent and future growth will likely be volume-led.”