HUL charts revival path after lockdown
BIG BOOST Company beats analysts’ estimates by reporting 4.4% revenue growth in the June quarter; net profit rises 7.1% to ₹1,881 cr
NEW DELHI: Hindustan Unilever Ltd reported a 4.4% revenue growth in the June quarter, beating analysts’ estimates, as people stocked up on ready-to-eat foods and personal hygiene products during the nationwide lockdown to contain the coronavirus pandemic.
Net profit of India’s largest household goods maker rose 7.1% to ₹1,881 crore in the three months ended June 30 from ₹1,755 crore in the year-ago period. Revenue from operations rose to ₹10,560 crore from ₹10,114 crore in the year earlier, the company said on Tuesday. Excluding the impact of the merger with Glaxosmithkline Consumer Healthcare Ltd, domestic consumer growth fell 7%. GSK’S consumer business was merged into Hindustan Unilever from April 1.
A Bloomberg survey of analysts expected the company’s quarterly revenue at ₹9,979.90 crore and profit at ₹1,721.60 crore.
The local unit of Unilever saw strong demand for its packaged foods and hygiene products as the pandemic spread rapidly across India. A revival in rural demand and the easing of one of the world’s strictest lockdowns are likely to help the maker of Lux soaps, Surf detergents and Lipton tea, to sustain sales even as the economy is headed for the worst recession since Independence.
The company’s foods and refreshment business saw revenue grow 52%, boosted by the integration of GSK’S popular brands such as Horlicks and Boost.
“Riding on the ‘In-home, wellness and immunity’ trends, foods, tea and coffee delivered strong performance with double-digit growths,” the company said.
The virus outbreak in India and the subsequent lockdown prompted consumers to spend disproportionally on categories such as health, packaged food and hygiene goods while postponing beauty and personal care spends, the June quarter earnings showed. The protracted shutdown also disrupted the operations of companies. Sales of the company’s detergents, soaps, packaged tea and shampoos that reach millions of households help analysts gauge consumer demand. Sanjiv Mehta, chairman and managing director of HUL, said a clearer picture of the demand situation will likely emerge in the September quarter.