HUL Q2 results: Firm reports 3.8% YoY rise in standalone net profit, beating estimates

HUL Q2 results:  Hindustan Unilever (HUL) on Thursday, October 19, reported a 3.8 per cent year-on-year (YoY) rise in its standalone net profit at Rs 2,717 crore for the quarter ended September 30, 2023 (Q2FY24). The FMCG major had posted a net profit of Rs 2,616 crore in the year-ago period.

Its revenue from operations for the quarter under review came in at Rs 15,027 crore, up 3.5 per cent against Rs 14,514 crore logged in the corresponding quarter of the previous fiscal.

Both the bottom line and top line were above analysts' estimates. Zee Business Research had estimated revenue at Rs 15,224 crore, up 3 per cent YoY, while the net profit was expected to remain flat at Rs 2,603 crore.

Earnings before interest, tax, depreciation, and amortisation (EBITDA) for the quarter came in at Rs 3,694 crore, up 9 per cent. EBITDA margin increased by 130 bps YoY to 24.6 per cent. 

The reported numbers include a one-off credit from a favourable resolution of past indirect tax litigation. This benefitted reported turnover and PAT growth by 1 per cent and 4 per cent, respectively, HUL said in its earnings release.

Commenting on the results, Rohit Jawa, CEO and Managing Director, said, ‘We delivered resilient and competitive growth while stepping up our EBITDA margin in a challenging operating environment, marked by subdued rural demand and heightened competitive intensity. Looking forward, we remain cautiously optimistic."

The CEO further said that FMCG demand is likely to continue a gradual recovery with tailwinds from the upcoming festive season, sustained buoyancy of services, and the government's thrust on capex.

"At the same time, we need to be watchful of volatile global commodity prices as well as the impact of monsoon on crop output and reservoir levels. In this context, our focus is to provide superior value to our consumers, drive competitive volume growth, and invest in our brands. We remain confident of the mid-to-long-term potential of the Indian FMCG sector and HUL’s ability to deliver consistent, competitive, profitable, and responsible growth," the CEO added.

HUL announces interim dividend

The company also announced an interim dividend of Rs 18 per share. The record date for the purpose of determining the entitlement for payment of interim dividend is fixed as 2nd November 2023.

HUL's verticals performance 

Home Care

Home Care grew 3 per cent with mid-single-digit UVG. UVG stands for underlying volume growth. Fabric Wash had mid-single-digit volume growth with the premium portfolio continuing to outperform. Household care volumes grew in high single digits led by Dishwash. Further price reductions were taken in both Fabric Wash and Household Care. Brand and marketing investments were stepped up to protect our competitive position. During the quarter, the Vim Pure range with plant-based actives and Comfort Intense Fabric Conditioner were launched.

Beauty & Personal Care

Beauty & Personal Care grew 4 per cent with mid-single digit UVG. Skin Cleansing had a low-single-digit volume growth with Lux and Hamam continuing to outperform. Revenue declined as further price reductions were taken in soaps. Skin Care and Colour Cosmetics grew double-digit driven by focused interventions in new demand spaces and channels of the future. Hair Care
delivered high-single-digit growth with Clinic Plus and Indulekha continuing to outperform. Oral Care grew mid-single digit led by Closeup. Key launches in this quarter include a new range of Vaseline moisturizers, Lakme serums and cosmetics, Pond’s serum, Indulekha Anti-Dandruff Oil and Shampoo.

Foods & Refreshment: Mid-single digit growth driven by pricing

Foods & Refreshment grew 4 per cent. Tea delivered modest growth as the category continued to witness consumers downgrading. Coffee grew in double-digits. HFD delivered mid-single digit price-led growth, broad-based across the portfolio. Foods and Ice Cream both grew in the mid-single digits on a high base. Foods Solutions, Mayonnaise and Peanut Butter continue to clock strong growths. During the quarter, Horlicks Strength Plus, Slow Churn Ice Cream and new blends of Lipton Green Tea were launched.