Hindustan Unilever (HUL) on Thursday saw a 136% rise in third-quarter standalone net profit to Rs 7,075 crore versus last year, thanks to an exceptional gain of Rs 4,516 crore arising out of the demerger of its ice cream business. Excluding the one-time gain, profit after tax grew 1% year-on-year to Rs 2,570 crore in Q3, broadly in line with street estimates of Rs 2,624 crore for the period. At a consolidated level, Q3 net profit rose 121% year-on-year to Rs 6,607 crore. Excluding the one-time gain, consolidated profit after tax also grew 1% year-on-year to Rs 2,562 crore in Q3.
“During the quarter, demand trends reflected early signs of recovery, underpinned by supportive policy measures. Against this backdrop, we delivered a competitive performance,” Priya Nair, CEO and managing director, HUL, said. Shares of HUL, however, declined 4.55% intra-day on the BSE on Thursday before finally settling at Rs 2,410.05 apiece, down 2.13% versus the previous day’s close.
The consumer goods major also reported a one-time exceptional cost of Rs 113 crore arising out of the implementation of the new labour code, which took effect recently. The firm’s standalone revenue rose 4.4% year-on-year to Rs 15,805 crore, below street estimates of Rs 16,111 crore for the period. Underlying sales and volume growth came in at 5% and 4% each for the quarter. While at a consolidated level, revenue growth was 5.7% YoY to Rs 16,441 crore, its results showed.
Standalone earnings before interest tax depreciation and amortisation (Ebitda) rose 2% YoY to Rs 3,640 crore, in line with street estimates, while Ebitda margins declined 50 bps to 23% in Q3 versus 23.5% reported last year. At a consolidated level, Ebitda rose 2.7% each to Rs 3,788 crore versus last year. While Ebitda margins saw a sharper 70 bps decline in Q3 (to 23%) from 23.7% seen last year. One basis point is one-hundredth of a percentage point.
Portfolio Transformation
HUL’s board also approved the purchase of the remaining 49% stake in Zywie Ventures for Rs 824 crore. Zywie is best known for making health and wellness brand OZiva. Consequent to the acquisition, Zywie (and its wholly owned subsidiary Zenherb Labs) will become wholly owned subsidiaries of the company, HUL said. Additionally, HUL divested its entire 19.8% shareholding in Wellbeing Nutrition.
Segmental Performance
At a segment level, HUL’s home care unit reported 3% underlying sales growth (USG) with “mid-single digit underlying volume growth (UVG)”, as the category continued to witness negative price impact due to pricing actions taken during the year.
Beauty & Wellbeing delivered 6% USG with low-single digit UVG, growth was driven by outperformance in premium brands, Dove and TRESemmé. Skin care and colour cosmetics saw a strong performance in light moisturisers and winter portfolio offset by subdued performance in the non-winter portfolio.
Personal care grew 6% driven by strong sales of Pears, Dove, Bodywash portfolio and strong oral care performance led by Closeup, the company said. While foods delivered 6% USG led by high-single digit UVG. Tea delivered mid-single digit UVG, while revenue recorded low-single digit growth, reflecting the impact of price reductions taken in a deflationary commodity environment, the company said.