Result Analysis: Hindustan Unilever Ltd. Result Update Q3FY22
Particulars (In ₹. Cr) Q3FY22 Q2FY22 Q3FY21 QoQ % YoY%
Revenue From Operation 13439.00 13046.00 12181.00 3.01% 10.33%
Other Income 60.00 53.00 54.00 13.21% 11.11%
Total Income 13499.00 13099.00 12235.00 3.05% 10.33%
Cost of Material 4023.00 4242.00 3656.00 -5.16% 10.04%
 Material Cost as % of Revenue 29.94 32.52 30.01 -7.94% -0.26%
Other Expenses 6306.00 5887.00 5892.00 7.12% 7.03%
EBITDA 3279.00 3132.00 2854.00 4.69% 14.89%
EBITDA Margin 24.40% 24.01% 23.43% 1.63% 4.14%
PBT 3024 2954 2596 2.37% 16.49%
PBT Margin 22.50% 22.64% 21.31% -0.62% 5.58%
PAT 2243.00 2185.00 1921.00 2.65% 16.76%
PAT Margin 16.69% 16.75% 15.77% -0.35% 5.83%
Basic EPS (in Rs. ) 9.78 9.28 9.28 5.39% 5.39%
Segment Revenue Q3FY22 Q2FY22 Q3FY21 QoQ % YoY%
Home Care 4192.00 3838.00 3409.00 9.22% 22.97%
Beauty & Personal Care 5213.00 5026.00 4868.00 3.72% 7.09%
Food & Refreshment 3466.00 3622.00 3356.00 -4.31% 3.28%
Others 568.00 560.00 548.00 1.43% 3.65%

Result Highlight:

  • HUL Ltd Consolidated Revenue rose01% QoQ and 10.33% YoY to ₹ 13439 crore. Other income rose 13.21% QoQ to ₹60 Crore.

  • Company reported EBITDA at Rs. 3279 cr with margins of 24.40%; Raw Material cost as % of revenue is 29.94%.

  • Net profit saw a degrowth of 16.76% YoY to ₹ 2243 crore for the December quarter compared with ₹ 1921 crore in the same quarter last Domestic Consumer Growth of 11% and Profit After Tax (PAT) growth of 17%, Volume Growth at 2% was significantly ahead of the market.

  • Home Care growth at 23% was broad based with strong performance in Fabric Wash and Household Care. Fabric Wash grew in strong double-digits with all parts of the portfolio performing well.

  • Beauty & Personal Care grew 7% led by Skin Cleansing, Skin Care and Colour Cosmetics

  • Foods & Refreshment grew 3% on a very high prior year comparator, driven by solid performance in Tea and Ice-creams

Management commentary: 

  • Sanjiv Mehta, Chairman and Managing Director commented: ‘We have delivered a strong and resilient performance in the quarter despite moderation in market growths and significant levels of commodity inflation. I am particularly pleased that the growth is extremely competitive with our market share gains being highest in more than a decade. Our performance is reflective of our strategic clarity, strength of our brands, operational excellence, and dynamic financial management of our business. In the near-term, operating environment will continue to remain challenging. In this scenario, we will manage our business with agility, continue to grow our consumer franchise whilst maintaining our margins in a healthy range

  • Management said Clearly, we are now seeing a slowdown happening in rural areas from a volume and value perspective.

  • Gross margin likely to remain under pressure; because of the rise in material cost but Judicious pricing actions coupled with cost agility and savings programmers will minimize the impact of high cost on margin.

  • Our first port of call is to drive very hard savings and then to take calibrated price hikes,” Ritesh Tiwari, chief financial officer at HUL said during the call, suggesting that the company could undertake more price hikes in the current quarter.

  • Total revenue growth came at 11% out of which 2% was volume growth and 9% was price growth

  • Management said rural market demand is slowing down because of inflation and urban market demand is picking up.

  • HUL is making huge investment in new innovative product which are expected to hit market in coming quarter.

  • Ocean Freight cost is also having an impact on margins as ocean freight is up 3x from last year, crude is 1.8x and palm oil is up 1.6x from last year.

  • HUL chief suggested that the government should not only continue the current outlay on the Mahatma Gandhi National Rural Employment Guarantee Scheme, which provides guaranteed 100 days of employment in rural areas but perhaps look at increasing it.

  • On the ongoing inflation in commodities, the soap-to-shampoo maker warned that raw material costs will firm up further in the March quarter but it expects to maintain its operating margins in a healthy range.


HUL Q3FY22 result was mostly inline to the street expectation volume growth was in line with the market expectation of 2% ,domestic growth was at 11% Revenue grew 10.33% of which 9% was price growth and 2% was volume growth PAT came in at ₹ 2243 crore, EBITDA margin was flat compared to last year at 24.4%. Company has manage margin well, as there raw material cost has moved up sharply, around 15% of total revenue come from digital market. HUL has gained market share in many segment and are expected to launch new products in coming quarter, management said rural market is slowing because of inflation pressure and government must support rural market in this budget We believe margin may come under little pressure due to palm oil prices, crude prices and ocean freight cost and management has said that they are going to further raise price and will be maintaining their margin. At the CMP of ₹2261, HUL is trading at PE multiple of 56x. Valuing the company at 58x FY23E EPS, we recommend buy on HUL at CMP of for the Target Price of ₹ 2780.

Source: BSE, Bloomberg Quint, EW Research

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