Particulars (In Rs. Cr.) Q3FY21 Q2FY21 Q3FY20 QoQ % YoY%
Revenue from Sales of Products 11682 11276 9696 3.6% 20.5%
Other Operating Revenue 180 166 112 8.4% 60.7%
Revenue from Operations 11862 11388 9862 3.7% 20.9%
Other Income 97 151 140 -35.8% -30.7%
Total Income 11959 11593 9948 3.2% 20.02%
Raw Material Expenses 3420 4107 2793 -16.7% 22.4%
Raw Material Expenses as % of Sales of Products 28.8% 35.9% 28.4% (710) bps 40 bps
EBITDA 2854 2869 2445 -0.5% 16.7%
EBITDA Margin 24.06% 25.19% 24.79% (113) bps (73) bps
Profit After Tax 1921 2009 1616 -4.4% 18.9%
PATM (%) 16.06% 17.33% 16.24% (127) bps (18) bps
Segment Revenue ( HUL+ GSK Consumer) Q3FY21 Q2FY21 Q3FY20 QoQ % YoY%
Home Care 3409 3318 3456 2.7% -1.4%
Beauty & Personal Care 4841 4535 4412 6.7% 9.7%
Foods & Refreshment 3356 3379 1865 -0.7% 79.9%
Others 256 210 75 21.9% 241.3%


Result Highlight: 

  • HUL Standalone Revenue rose 20.5% over a year earlier to Rs 11,862 crore compared with the estimated Rs 11,276 crore.
  • Consolidated revenue from operations grew 21 percent to Rs 11,872 crore in Q3FY21 compared to Rs 9,808 crore reported in the same period last year, with domestic volume growth of 4 percent.
  • Net profit of the company rose 19% year-on-year to Rs 1,921 crore in the three months ended September compared with the estimated of Rs 2052 crore.
  • EBITDA margins declined 73bps to 24.06% due to higher advertising expenses (up 19% YoY) and higher operating overheads (up 28% YoY),
  • Volumes rose 4% in the reported period, excluding the consumer businesses acquired from GlaxoSmithKline Plc and VWash.
  • Beauty & Personal Care Margins expanded to 29% from 28.4% in Q3FY20. 

Segments Performance:

  • HUL’s health, hygiene and nutrition segment, which is 80% of its portfolio, grew 10% in the September quarter, on a YoY basis.
  • Contraction in its discretionary category comprising cosmetics, deodorants and ice-cream, which is 20% of the portfolio, narrowed. In the December quarter the decline was 1% y-o-y compared to a 25% decline in the September quarter.
  • In Beauty & Personal Care Segment Oral Care and Hair Care showed double digit growth. Oral Care Double-digit growth led by Close Up
  • Skin cleansing grew in double digits on the back of a very strong performance in ‘Lifebuoy’. Premium Skin Cleansing (Dove & Pears) revives; grows double-digit. Lux growth momentum sustained.
  • HUL Food and Refreshment Segment grew 19% excluding merger impact of GSK Consumer.
  • In Foods & Refreshment Tea continues to outperform with strong double-digit growth across brands; Coffee delivers well on a high base
  • Bru Vedawith goodness of Ayurveda launched in South, Horlicks targets adult nutrition with the relaunch ofitsPlus range
  • Entered new demand spaces with launch of ‘Vim Matic Dishwash’, ‘Surf Excel Smart Spray’ and ‘Surf Excel Active Hygiene’ to cater to consumer’s needs
  • The company is witnessing raw material inflation in some of the categories.
  • The company cut prices in its fabric wash category by 2.5% to pass the benefits of lower input costs.

Management commentary: 

  • Sanjiv Mehta, Chairman and Managing Director commented “The near-term demand outlook is improving, and we expect to see revival in urban while rural should continue to do well. Inflationary pressures are building up in select commodities and we will manage them judiciously. I am confident that we are very well positioned to capture the growth opportunities and accelerate momentum.”
  • Demand for hygiene category has tapared off
  • Rural towns growing in Double digit, Urban market have also improved
  • Commodities prices: Tea and palm prices are up more than 50% on a year-on-Year basis
  • FMCG market growth have picked up in the quarter
  • Took a double digit price hike in tea, and a 2.5% increase in skin cleasing portfolio during the period. HUL is in the process of taking another price rise of 2.5% for skin cleansing products.
  • Broad based improvement across various macro indicators


HUL Revenue for the Q3FY21 beats the street estimates on revenue front however profit comes below estimates due to higher advertising and overhead cost. Management expects gross margin to remain under pressure in short term due to higher Raw Material  inflation and inferior product mix However, it is icreasing price hikes for soaps and Tea portfolio in order to mitigate RM pressure which would help in sustaining of margin to some extent. We remain positive on Hindustan Unilever from a long-term perspective, encouraged by robust earnings growth potential beyond the near term owing to its portfolio and execution strengths and significant synergies in FY22E as a result of acquisition Horlicks and boost from GlaxoSmithKline. The company’s earnings growth has gained further momentum in recent years growing at 13% EPS CAGR in the past 5 years. Valuing the company at 61x FY22E EPS, we recommend buy  HUL at CMP of Rs. 2330 for the Target Price of Rs. 2,800.


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