Decoding the HUL Result For this Quarter

Before jumping onto the result analysis of HUL let’s first discuss the company and its various brands. HUL has been a pioneer for years to help the consumers get their daily essential goods. The company is actually not based in India. Yes, as shocking as it seems HUL is a U.K. based company. Though its name is set as Hindustan Unilever Limited the company has been serving the Indian consumers from overseas since its inception. It is the subsidiary of Unilever which is a London based firm. The headquarters of HU are however located in India. Some brands owned by HUL are Boost, Horlicks, Dove, Axe, Knorr, Lifebuoy, Lux etc.

The company initiated its business operations in 1933. Thereafter it has reported a continuous growth in business. After Independence the Hindustan (India) based business was known as Hindustan Unilever Limited.  The current CEO of HUL is Sanjeev Mehta. He has held the office since 2013. 

Mission and Vision of Company

The company’s major business is based in Rural areas. Yes, it has a high penetration into su8ch areas due to its year long network base. The company has been very active in serving its rural customers with a wide variety of essentials. Thus one of its missions is to supply all its products to every person who needs the same through its string network. Currently the Unilever group employs more than 1.49 Lakh people across 185+ countries with 400+ brands.

The company believes in social development beyond profitability. Even its logo is a display of the same. It symbolises that sustainability is beyond profitability. Also the company wants to create a sustainable life possible for every person. 

Brands

There are various brands under the Unliever group.  As mentioned earlier Unilever owns and runs 400+ brands across the world. Under HUL, the major brands are :-

• Axe
• Cif
• Comfort
• Cornetto
• Dove
• Boost
• Horlicks
• HELLMANN’s
• Lifebuoy
• Magnum
• Lipton
• Knorr
• Pepsodent
• PONDS
• Sunsilk
• TRESemme
• Vaseline
• Wheel
• BRU
• Close Up
• Pears
• LAKME
• Domex
• Surf Excel
• Rin
• VIM
• Brooke Bond
• Clinic Plus
• ELLE 18
• Indulekha
• Hamam
• Liril
• Kissan
• Kwality Walls
• Rexona
• Love and Care
• Pure Derm
• V Wash and more

Thus the list of brands under various segments of consumer essentials goes on. This is just the brand list under the HUL segment. Under Unilever there are 400+ brands generating revenues for the company in all.

Results

The quarterly results have been noticing growth this time as well. However this is a lesser than expected. The growth achieved is close to 5% whereas the average taken for the company by analysts was around 7%. The results display a clear rise in Profits by 8.85%. But this is not enough as the increase in revenue is not upto the mark. The Dividend declared towards the shareholders is 15 Rs.

The company’s revenue stood at 12500 Crore Rs for this quarter. The sale for the last quarter was close to 11300 Crore Rs. This is just a 6.5% increase in revenues. On the other hand the growth was expected higher due to the opening up of the economy post the COVID situation. Every state has now been opening up its doors slowly for business growth. This means that the selling for HUL should have received a greater boost.

This has also been true in some segments. The skincare segment. Tea business or the Haircare and cosmetics segment. However On the other hand the Healthcare segment has seen a decrease. Due to the COVID liberalisation the Hygiene Ce based business for soaps and sanitizers has seen a great decrease. This should not affect the growth much as the company has a strong demand on the consumer essential fronts, but the figures show no probable increase in any segment.

The results displayed are not that bad, but the shareholders expected a lot better from the company. The dividend does not justify the efficient working of the company. 

Price Rise and Inflation

HUL has been giving out statements that due to the inflation caused by coal and other factors of the economy it will undergo a constant rise in prices. The price rise is going to last for a longer time given the increased prices in every material. The demands have been enough but the supply for the same cannot be met efficiently. Thus the increased inflation has been there. To counter such a rise in prices the company will undergo a price increase drive across all the segments to balance its revenues and promote sustainability for a longer run.

The demand has been rising but this is not as expected. The diminishing levels of demand overtime define a rise in competition or consumer’s shifting towards competitors. Due to this concern the company is not very sure about the same problem and is not optimistic as well on further increase in demand in coming times.

The price of HUL was stable until the declaration of its results. Post that the company ended its day on 19th October in the red zone with a 3.64% decrease in valuation. This defines a hit of almost 100 Rs on the share valuation. The current price for the company is 2557 Rs.