HUL is the largest FMCG company in India, operating in 15 categories, with 130 plus years of history in India. The company. The company has a significant presence in the Indian food and refreshment, beauty and personal care and home care segment, present across all the categories serving products for mass, popular, premium, and super-premium.
For Q4FY22, Hindustan Unilever experienced a 10% growth in revenue to INR 13,190 Cr with flat volume growth. The home care segment growth was 24% and revenue was INR 4,750 Cr. Other segment growth was between 4%-5%. Beauty and Personal Care has the highest margin of 26%. The company's PAT increased by 9% to INR 2,327 Cr with an EBITDA margin of 24.6% which decreased by 20 bps due to inflation in crude and palm oils.
In Q4FY22, the company has increased revenue by 11% to INR 50,336 Cr. With volume growth of 3% by growing the core ahead of market, premiumization and market development. Beauty and personal care was the segment with the highest margin of 28% and the highest sales of INR 19,460 Cr. The net profit of the year was INR 8,818 Cr. with an EBITDA margin of 24.8%. The cash from operations was INR 11,684 Cr.
In retail industry, companies are going for shrinkflation where they will not be increasing the price per piece of product but will reduce the quantity not only giving benefits on the raw material side but also on the logistic and administrative side as well because the per piece expense allocation will be reduced. Also, companies have been increasing the prices of some of the products like oils in their portfolio. These methods of passing down the cost to the retail buyer cannot go forever as the buyers after a certain point will shift to a product which will be sub-standard but economical to them, and companies cannot lose the volumes of the sale especially om the preimmunized products as it is the major part of the bottom line of the retail companies.
With retail inflation jumping to 7.79%being 8 year high the margins will not be improving in the Q1FY23. Industry leaders expect that the margins will be back to normal in Q2 and Q3FY23. But as the inflation is rising small retail players are continuously losing their market share and shutting down, while all the big players are gaining market share.
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