HUL’s shares closed up 2.63% on the BSE on Friday. Photo: Pradeep Gaur/Mint
Mumbai: Hindustan Unilever Ltd (HUL), the country’s largest listed consumer packaged goods company by sales, on Friday reported a 19.5% rise in net profit for the second quarter ended September 30, 2019, beating analysts’ estimates .
The India unit of Anglo-Dutch consumer goods maker Unilever Plc said net profit rose to Rs 1,525 crore in the quarter, from Rs 1,276 crore a year ago. Sales increased 11.1% to Rs 9,234 crore compared with Rs 8,309 crore, said the maker of Knorr soups, Surf and Wheel detergents, and Lux soaps.
A Bloomberg poll of 12 analysts had estimated HUL’s Q2 profit at Rs1,425.7 crore and revenue at Rs9,216.1 crore.
HUL’s operating profit margin, a measure that indicates how effective a company is at controlling costs, expanded 162 basis points to 21.86% in the quarter from a year earlier. The improvement was on account of well-established savings programme and leverage.
Meanwhile, the macroeconomic environment is worsening. Market volatility, rupee depreciation and crude oil price increases have an impact on consumer sentiment. The Reserve Bank of India’s (RBI’s) Consumer Confidence Index in September recorded negative sentiment with signs of deterioration compared with the last round in June.
Still, HUL’s growth is holding up. The CPG maker reported underlying volume growth of 10%, lower than the 12% in the preceding quarter.
The September-quarter growth was driven by the personal care portfolio, accounting for nearly half of its overall revenue. The segment grew 10.38%. The homecare portfolio, including detergents business, which accounts for close to a third of the company’s overall revenue, grew 12.45%; its foods and beverages segment grew 11.66%, led by tea and coffee.
The fast-moving consumer goods sector and HUL already command a price-to-earnings multiple of 32.10 and 54.90 times, trailing 12-month earnings each, respectively.
HUL’s shares closed at Rs1,568.65, up 2.63% on the BSE on Friday. Results were announced after market hours.