HUL sees gradual improvement in demand; 5 key takeaways from Q1 results
The company’s net profit rose to Rs 1,529 in Q1FY19 against Rs 1,283 crore last year.
"We have delivered another strong performance in the quarter, with double digit volume growth across all three divisions and further improvement in margins," said Sanjiv Mehta, Chairman and Managing Director, Hindustan Unilever.
Brokerage firm Sharekhan said, “HUL Q1FY19 performance was in-line with the expectation with 22 per cent growth in the bottom line. The highlight of the quarter was sustenance double digit volume growth at 12 per cent in the domestic business. The strong volume growth can be attributed to uptick in the rural demand and strong traction to new launches. With rural consumption improving we expect strong volume growth momentum to sustain in the coming quarters. The volatility in the input prices needs to be keenly monitored in the coming quarters. HUL is one of our top pick in the FMCG space.”
Here are 5 key takeaways from HUL’s Q1 earnings:
- EBITDA jumped by 20.6 per cent YoY to Rs 2,250 crore with EBITDA margin expansion of 180 basis points to 23.7 per cent - came in line with market estimates. A 190 basis points and 130 basis points decline in raw material and other expense was partially offset by 150 basis points rise in advertising and promotion (A&P) spends.
- At the segmental level, net sales are not comparable as last year results includes excise duty. Home care, beauty and personal care and foods and refreshments reported 440 bps, 170 bps and 330 bps expansion in EBIT margin respectively.
- Earnings per share (EPS) of the company increased to Rs 7.06 in June quarter from Rs 5.93 in the same quarter last year.
-Revenue from operations of the company increased 2.88 per cent YoY to Rs 9,356 crore during the quarter under review over Rs 9,094 crore in the same quarter last year.
- For the near term, Mehta added that they see gradual improvement in demand and focus will continue to be on innovations and market development. Crude volatility and currency led inflation are key risks going ahead. “We will continue to manage our business dynamically while driving operational efficiencies," he added.