Result Analysis: Hindustan Unilever Ltd. Result Update Q2FY22
Particulars (In ₹. Cr) Q2FY22 Q1FY22 Q2FY21 QoQ % YoY%
Sale of Product 12516 11730 11276 6.70% 11.00%
Other Income 113 67 151 68.66% -25.17%
Total Income 12837 11982 11593 7.14% 10.73%
Cost Of material Consumed 4092 3551 4107 15.24% -0.37%
Other Expenses 5791 5772 4744 0.33% 22.07%
Material Cost as percentage of revenue 32.69% 30.27% 36.42% 8.00% -10.24%
EBITDA 3132 2,847 2869 10.01% 9.17%
EBITDA Margin 25.02% 24.27% 25.44% 3.10% -1.65%
Profit After Tax 2,187 2,061 2,009 6.11% 8.86%
PATM (%) 17.47% 17.57% 17.82% -0.55% -1.92%
Basic EPS (in ₹. ) 9.31 8.55 8.77 8.89% 6.16%
Segment Revenue Q2FY22 Q1FY22 Q2FY21 QoQ % YoY%
Home Care 3,838 3,797 3,318 1.08% 15.67%
Beauty& Personal Care 5,000 4,573 4,535 9.34% 10.25%
Food & Refreshment 3,622 3,319 3,379 9.13% 7.19%
others 264 226 210 16.81% 25.71%

Result Highlight: 

  • HUL Revenue rose 70% QoQ and 11% YoY to ₹ 12516 crore – inline with the estimates of ₹ 2175 Crore. Other income fall 25% YoY to ₹ 113 Crore.

  • EBITDA Margin was flat at 02% from 24.27% last quarter.

  • Net profit rose 8.86% YoY to ₹2187 crore for the September quarter compared with ₹ 2009 crore in the same quarter last Reported strong operating Cash flow of ₹ 4101 Cr in Q2.

  • EBITDA for the quarter at ₹ 3132 crore grew by 9%.

  • Home Care Business grew 16% y-o-y.

  • Beauty & Personal Care grew 10% led by Skin Care, Colour Cosmetics and Hair Care. Contextual communications in Hair Care continue to yield good results as it delivered another quarter of strong performance.

  • The company approved an interim dividend of ₹ 15 per

  • Volume Growth came in at 4% which was below street expectation.

Management commentary: 

  • Sanjiv Mehta, Chairman and Managing Director said “September quarter witnessed a sequential improvement in trading conditions, albeit remained challenging with unprecedented levels of input cost inflation and subdued consumer sentiments. In this backdrop, we have delivered a strong performance growing topline in double digits and stepping up profitability sequentially. Large parts of our business continue to gain market shares and penetration. Calibrated price increases and laser sharp focus on savings has helped us protect our business model while ensuring the right price-value equation for our consumers”.

  • Management said they remain cautiously optimistic about demand recovery. In these times of uncertainty and unprecedented input cost inflation.

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

  • 15% of the total revenue came from digital market, and this market will continue to grow going forward.

  • Total revenue growth came at 11% out of which 4% was volume growth and 7% was price growth

  • Management said rural market demand is normalizing 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 and it is expected to remain northward going forward due to container shortage.

  • Management said they are seeing very good rebound in their Ice cream segment.

  • Management said that they have taken 7% price hike to offset cost pressure and will continue to take more hike to maintain margins.


HUL Q2FY22 result was mostly inline to the street expectation but the biggest disappointment was the volume growth which came in at 4% which was lower than street expectation of 6-7%, Revenue grew 11% of which 7% was price growth and 4% was volume growth PAT came in at ₹ 2187 crore, EBITDA margin was flat compared to last year at 25%. 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 is quite confident of the uptick in demand as economy is opening up and ecomonic activity is picking up and fells they are going to pass on the material cost hike to their customer We believe margin may come under little pressure due to palm oil prices, crude prices and ocean freight cost . At the CMP of ₹2546, HUL is trading at PE multiple of 64x. Valuing the company at 62x FY23E EPS, we recommend buy on HUL at CMP of for the Target Price of ₹ 2850.

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