Hindustan Unilever's (HUL) numbers for the Q4FY19 were broadly in-line with consensus estimates. The company reported revenue growth of 9.3% yoy to Rs9,945cr driven by a 7% underlying volume growth (estimated ~6.5% volume growth). Given that the input costs remained benign during the quarter, gross margin remained flat. EBITDA grew by 13.3% yoy to Rs2,321cr, in-line with the estimate. The EBITDA margin expanded marginally by 83bps yoy to 23.3%. Further, in-line with EBITDA, PAT reported growth of 13.8% yoy to Rs1,538cr (estimate 1,618cr).
The company has reported 9% yoy domestic consumer growth, led by 7% yoy underlying volume growth.
The home care segment reported 12.9% yoy growth to Rs3,502cr with 120bps yoy expansion in EBIT margin at 17.7%. The segment’s performance was driven by strong volume led growth with both fabric wash and household care. Both segments reported double digit growth. Fabric care was driven by premiumisation and market development initiatives (Surf Excel Easy Wash liquid was launched nationally), while household care was driven by liquids upgradation and increased penetration of bars.
The beauty and skin care segment (earlier Personal care) saw 7.3% revenue growth to Rs4,393cr with 26bps yoy expansion in EBIT margin to 27.8%. In personal wash, while premium brands continued their growth momentum, popular segment delivered below expectations, leading to lower growth of the segment. In the personal wash, company launched Liril body wash & bar variants with strong freshness proposition. Also, Dove Nourishing secrets was launched nationally with natural ingredients to enhance presence in naturals category.
Food and refreshment segment reported 10.4% yoy revenue growth to Rs1,916cr with EBIT margin expansion of 146bps yoy to 18.1%. Ice cream and frozen desserts registered strong growth. Company has launched an exciting range of innovations for the summer season.
The advertisement spends was down 63bps yoy as percent of net sales to 11.1%.
Other income for the quarter grew by 18% yoy to Rs118cr.
Tax rate for the quarter stood at 30%, flat yoy.
Given the macro-economic indicators, company has indicated that the near-term market growth has moderated, the March quarter witnessed some moderation in rural market growth.
Company has recommended a final dividend of Rs13 per equity share of Rs1 for FY19.
Hindustan Unilever Ltd is currently trading at Rs. 1,665, down by 27.8 points or 1.64% from its previous closing of Rs. 1,692.80 on the BSE.
The scrip opened at Rs. 1,693.90 and has touched a high and low of Rs. 1,693.90 and Rs. 1,663 respectively. So far 6,22,631 (NSE+BSE) shares were traded on the counter. The stock is currently trading above its 100 DMA.
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