Home care, food & beverage boost Q2 revenue for HUL: Key takeaways

Hindustan Unilever (HUL) delivered robust year-on-year growth in profit amid demand slowdown thanks to better performance is homecare, food and refreshment segments.

Volume growth slowed to 5 per cent for the quarter compared with a 10 per cent expansion in the year-ago quarter.

Here are key takeaways from the Q2 numbers of HUL:

Marginal effect of tax cut on profit
The corporate tax rate cut had little effect on Hindustan Unilever’s profit figure. It posted a 21 per cent year-on-year (YoY) rise in net profit at Rs 1,848 crore after incorporating the reduction in corporate tax rate. Excluding corporate tax rate benefit, the profit figure would be Rs 1,832 crore, up 20 per cent. The numbers beat analysts’ profit estimate of Rs 1,700 crore made in an ETNow poll.

Homecare sees robust growth
The homecare segment of the FMCG giant was a major revenue growth driver, thanks to consistent topline delivery in fabric wash. The segment registered 9.44 per cent growth in the quarter and the revenue stood at Rs 3,371 crore. Premium brand Love & Care was launched in select channels and Magic Rinse powder was launched in Tamil Nadu during the quarter.

Water Purifiers also witnessed a good performance in the premium segment, the company said.

Personal care revenue slows down QoQ
The Beauty and Personal Care segment, which is the largest contributor of HUL’s revenue, grew 5.2 per cent YoY to Rs 4,543 crore. However, it was less than Rs 4,589 crore in June quarter. “Fair & Lovely soap continues to gain traction. Skin Care had double digit growth with robust performances across the brands.. Hair Care grew steadily. Colour Cosmetics sustained its strong growth momentum and oral care recorded good portfolio growth,” said HUL.

Other divisions fare mixed
The food and refreshment division grew 8.3 per cent to Rs 1,847 crore thanks to growth in the sale of beverages, icecream and frozen desserts and the Kissan line of products. However, the company's exports, infant and feminine care segment contracted 32 per cent YoY generating Rs 91 crore in revenue.

Dividend @ Rs 11/share
The Board of Directors declared an interim dividend of Rs 11 per share for the year ending March 31, 2020.

New member on board
Hindustan Unilever (HUL) appointed Willem Uijen as Executive Director, Supply Chain and a member of the HUL Board with effect from January 1, 2020. He will replace Pradeep Banerjee who is retiring.