HUL reports positive results for Q3FY19

HUL witnessed strong volume-driven growth in Q3FY19. The domestic consumer segment registered a growth of 13 per cent while the underlying volume growth stood at 10 per cent.

The company reported EBITDA of Rs. 2,046 crore, up 22 per cent. Margins climbed by 170 bps on the back of an improved product mix and operating leverage. The considerable volatility in crude and currency were managed well by HUL.

HUL reported a net profit of Rs. 1,444 crore, thereby registering a growth of 9 per cent. It has scaled up its pace of innovation, reach and improved distribution. It has optimized inventory holding while sustaining high service levels. Its savings as a percentage to turnover have scaled up as well.

The rural markets are growing ahead of the urban markets. HUL reported positive sales growth across all divisions. The Home Care segment reported double-digit volume growth of 16 per cent, while the Beauty & Personal Care segment improved 12 per cent owing to premiumization. Meanwhile, the Foods & Refreshment segment showcased healthy growth of 9 per cent.

The Home Care, Beauty & Personal Care and Foods & Refreshment segments demonstrated robust revenue growth of 15 per cent, 11 per cent and 9 per cent, respectively; while reporting segment margins of 13 per cent, 26 per cent and 14 per cent, respectively.

In the short-run, the demand outlook for HUL seems stable. However, the company will have to closely monitor the macroeconomic environment for consumer demand as well as costs.

On Friday, the shares of HUL opened at Rs. 1,757.00 and hit a high and low of Rs. 1,768.65 and Rs. 1,728.65, respectively. At 10:23 am, the stock was trading at Rs. 1,745.65 per share, down 0.25 per cent.