FMCG major Hindustan Unilever (HUL) on Thursday reported a 9.6 percent jump in its net profit for the first quarter of fiscal 2021 at Rs 2,061 crore as against Rs 1,881 crore in the corresponding quarter of last fiscal.
The company’s revenue from operations rose 12.8 percent to Rs 11,915 crore from Rs 10,560 crore, YoY. HUL’s domestic volume growth during the quarter was at 9 percent as compared to CNBC-TV18 analysts' poll estimates of 6-8 percent growth.
The company’s net profit and revenue were also in line with the estimates.
“In a challenging context of COVID Wave 2, HUL delivered a strong performance with Domestic Consumer Growth of 12%, Underlying Volume Growth of 9% and Profit after tax growth of 10%. Performance was broad based with all 3 divisions growing competitively and in double-digits. Our business fundamentals remain strong with a large part of our business gaining penetration,” Hindustan Unilever said in a regulatory filing.
On the operational front, EBITDA in Q1FY22 increased 7.7 percent to Rs 2,847 crore from Rs 2,644 crore, while EBITDA margin weakened by 110 bps to 23.9 percent from 25 percent, YoY.
HUL's Home Care segment grew at 12 percent enabled by double-digit growth in Fabric Wash. Household care continued to perform well growing in high double-digits on a strong base, the company said.
Beauty & Personal Care grew 13 percent led by Hair Care and Skin Care, both growing in high double-digits. Contextual communications in Hair Care continue to yield good results.
Skin Cleansing continued its strong momentum, soaps grew on a high base and premium segment performed well, it added.
Foods & Refreshment delivered another quarter of strong performance and grew at 12 percent.
"Looking forward, we remain cautiously optimistic about the demand recovery. Our focus firmly remains behind delivering volume led competitive growth and margins in a healthy range," said Sanjiv Mehta, Chairman and Managing Director, Hindustan Unilever.
Commenting on HUL's Q1 earnings, Shirish Pardeshi of Centrum Broking said that volume growth at 9 percent faltered a bit as he was expecting it to be around 10 percent.
"I think the household segment has done better. Growth might have some issues on the Glaxo portfolio. While we were expecting margins to be range-bound having taken price increase but I think the full impact of price increases would have not seen in this quarter and we would have to wait for the current quarter to see that kind of impact on the margins," Pardeshi said.
Market expert Prakash Diwan believes that now people will start to realise that stocks like HUL offer a great level of safety and all the downside has been captured in the price.
"The kind of market share gains that some of these names have made in the recent months, especially in the second wave, lockdown related slowdown, I think HUL definitely stands to gain after this set of numbers. There is no disappointment, which is a big relief," said Diwan.
At 1:50 pm, the shares of Hindustan Unilever were trading 0.27 percent higher at Rs 2,440.50 apiece on the BSE.
First Published: IST