Hindustan Unilever Share Q3 Results

For the Dec-21 quarter, Hindustan Unilever reported 10.33% YoY growth in total revenues for the Dec-21 quarter at Rs.13,439 crore on a consolidated basis. Short term momentum over the sequential quarter was also quite robust. During the December 2021 quarter, Hindustan Unilever delivered strong volumes and a robust pricing resulting in strong sales numbers even as the rural market continued to be challenging for FMCG players.

In terms of specific business verticals, Hindustan Unilever witnessed growth of 23% in the home care business at Rs.4,192 crore. The beauty and personal care vertical witnessed higher revenues of 7.1% at Rs.5,213 crore. The Food and exports business were largely flat. The underlying volume growth in the quarter was 2%, which is best among the peer group but what is more encouraging is the power that HUL had to increase prices for key markets.

Let us now turn to the operational performance of HUL. For Dec-21 quarter, operating profits from the core operations were up by 17.18% year on year. The sharp rise in the operating profits can be largely attributed to the smart operating profit growth in the home care and the foods business. Let us first look at the home care business. Along with solid revenue growth, home care operating profits were up 33% at Rs.861 crore in Q3.

On the other hand, the operating profits from the high growth food and refreshment vertical was 37% higher in the quarter on a YoY basis at Rs.646 crore. However, the operating profits of the beauty and personal care division was almost flat on a YoY basis at Rs.1,454 crore. Operating margins expanded from 21.98% in Dec-20 quarter to 23.34% in the Dec-21 quarter. Incidentally, the operating margins are also higher on a sequential basis.

In the FMCG business, the financial costs are quite low so the operating profit trend normally gets transmitted to the bottom line also. Just to put it in numbers, the net Profit or the PAT for the Dec-21 quarter was up 18.59% YoY at Rs.2,297 crore.  PAT margins improved from 15.90% in the Dec-20 quarter to 17.09% in the Dec-21 quarter, a 109 bps accretion. The PAT margins were also higher by 35 basis point on a sequential basis.

Overall, the results can be summed up as robust on the top line and the bottom line. Volumes growth at 2% is robust and it is all the more appreciable when rural demand is under pressure. Pricing power is also visible in the numbers.