HUL Q2 profit jumps 20% to Rs 1,525 cr, volume growth beats expectations

Moneycontrol News

FMCG major Hindustan Unilever has reported 19.5 percent year-on-year growth in standalone profit to Rs 1,525 crore, driven by strong volume growth and operational performance.

Profit in the year-ago period stood at Rs 1,276 crore.

Revenue during the quarter increased 11.1 percent year-on-year to Rs 9,234 crore with volume growth of 10 percent which was ahead of Street expectations of around 7-9 percent.

HUL had reported volume growth of 12 percent in June quarter 2018 and 4 percent in September quarter 2017.

"Our well-established savings programme and leverage in other expenses has enabled us to mitigate material inflation and drive margin improvement," the company said in its filing.

On the operational front, EBITDA (earnings before interest, tax, depreciation and amortisation) grew by 20 percent to Rs 2,019 crore and margin expanded by 170 basis points to 21.9 percent compared to year-ago period.

Sanjiv Mehta, Chairman and Managing Director said, "In the near term, we expect demand to be stable. Our strength of agility and responsiveness gives us confidence to navigate the headwinds arising from crude inflation and currency depreciation."

Raw material cost increased 15.9 percent year-on-year to Rs 3,343 crore in the quarter ended September 2018. During the quarter, crude oil prices rallied 4 percent during the quarter and 27 percent year-to-date while rupee fell nearly 6 percent in Q2FY19.

Home care business during the quarter grew by 12.4 percent to Rs 3,080 crore with its EBIT rising 28.5 percent driven by strong volume growth YoY.

"Stellar performance in Home Care continued with Fabric wash and Household care delivering double-digit growth. Our market development and premiumisation initiatives are delivering good results," HUL said.

Company's beauty & personal care segment revenue increased 10.4 percent year-on-year to Rs 4,316 crore with EBIT showing a 17.6 percent growth.

The FMCG major said foods & refreshment business registered robust growth across categories with beverages, and cream and frozen desserts and foods showing double-digit growth.

Foods & refreshment revenue in Q2 grew by 11.7 percent to Rs 1,704 crore and its EBIT jumped 24.7 percent to Rs 288 crore compared to year-ago.

HUL said the board of directors has declared an interim dividend of Rs 9 per share for the year ending March 2019.

Meanwhile, the company appointed Leo Puri as an independent director on its board effective October 12, 2018.

Hindustan Unilever share price closed at Rs 1,568.65, up 2.63 percent from previous close. Second quarter earnings announced after market hours.

Original Source: https://www.moneycontrol.com/news/business/markets/hul-q2-profit-jumps-20-to-rs-1525-cr-volume-growth-beats-expectations-3040241.html