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HUL’s second quarter net profit grows 20% to ₹2,616 cr; says it is cautiously optimistic in the short term

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  • HUL’s margin was hit in the quarter by commodity inflation, as analysts had predicted.
  • The FMCG giant said it is “cautiously optimistic in the near term.”
  • Shares of HUL closed 1.99% higher at ₹2,652 Friday, on expectations of strong quarterly earnings.
  • The company announced an interim dividend of 17 per share.

The single net profit of the largest FMCG player Hindustan Unilever grew 19.6% to 2,616 crore for the September quarter, from ₹2,187 crore in the same quarter last year.

The company’s operating income increased by nearly 16% year-on-year to 14,751 crore.

“Growth was significantly ahead of the market, with over 75% of the company gaining value and volume market shares. The 23.3% EBITDA margin remained healthy despite unprecedented inflationary headwinds,” the company said in a statement.

HUL’s margin was hit by commodity inflation in the second quarter, as analysts had predicted. EBIDTA margins for the quarter were 23.2% lower than the 24.6% reported in the same quarter last year.

Furthermore, the FMCG giant remains cautious about inflation affecting the demand environment and says it is “cautiously optimistic in the near term.”

“The demand environment remains challenging with inflation impacting consumption. However, given the easing of some commodities and government monetary/fiscal measures, we are cautiously optimistic in the near term. In this scenario, we will manage our business with agility, continuing to expand our consumer franchise while keeping our margins in a healthy range,” said Sanjiv Mehta, CEO and MF at Hindustan Unilever.

“We remain confident in the medium to long-term potential of the Indian FMCG industry and in HUL’s ability to deliver consistent, competitive, profitable and responsible growth,” he added.

Particularities Revenue Net profit EBITDA margin
Q2 FY23 ₹14,751 crore ₹2,616 crore 23.2%
Q2 FY22 ₹12,724 crore ₹2,187 crore 24.6%

The company has announced an interim dividend of 17 per share.

Shares of HUL closed 1.99% higher at ₹2,652 Friday, on expectations of strong quarterly earnings.

Double-digit performance in home care, beauty segment
During the second quarter of the fiscal year, the company achieved 34% growth in the home care segment. Both laundry and home care grew by high double digits and all areas of the portfolio performed well.

Surf Excel Matic Power Concentrate and Comfort Sweet Dreams were launched during the quarter.

The beauty and personal care space grew 11%, led by outperformance in premium portfolios such as Lux, Dove and Pears. The hair care segment strengthened its market leadership, with strong, broad performance, the company said.

Meanwhile, foods and refreshments, including brands such as Knorr, Kissan, BRU and Kwality Wall’s, grew 4% on a solid performance in foods, coffee and ice cream.

Tea business volumes grew at mid-single digits, while sales declined marginally due to price cuts. Coffee continues to do well with double-digit growth. Health Food Drinks continued to gain market share and penetration through targeted market development actions.

Horlicks has sown new sizes of Nutri Gummies and Diabetes Gummies. Quality Wall’s launched new flavors and Kissan launched Hazelnut Choco Peanut Butter.

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