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HUL gains on encouraging outlook

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Capital Market
Last Updated : May 11 2016 | 12:01 AM IST

Hindustan Unilever rose 1.81% to Rs 861.45 at 11:51 IST on BSE after the company's Chief Financial Officer P.B. Balaji said that he expects a sequential improvement in the company's sales volume growth in Q1 June 2016.

Meanwhile, the BSE Sensex was down 34.29 points, or 0.13%, to 25,654.57.

On BSE, so far __ shares were traded in the counter, compared with an average volume of 1.19 lakh shares in the past one quarter. The stock hit a high of Rs 866.60 and a low of Rs 847 so far during the day. The stock hit a 52-week high of Rs 944 on 8 July 2015. The stock hit a 52-week low of Rs 765.35 on 27 January 2016. The stock had underperformed the market over the past one month till 9 May 2016, falling 0.46% compared with 4.11% rise in the Sensex. The scrip had also underperformed the market in past one quarter, rising 2.36% as against Sensex's 6.94% rise.

The large-cap FMCG giant has an equity capital of Rs 216.39 crore. Face value per share is Re 1.

Hindustan Unilever (HUL)'s Chief Financial Officer P.B. Balaji was quoted as saying after the announcement of the company's Q4 March 2016 results yesterday, 9 May 2016, that he expects a sequential improvement in the company's sales volume growth in Q1 June 2016. His comments came after the company reported a tepid volume growth in its domestic consumer business in Q4 March 2016. Volume growth stood at 4% on year-on-year basis in Q4 March 2016. Balaji was quoted as saying that the demand remains subdued, especially in rural areas, and a good monsoon would be a welcome tailwind. He also said that raw material prices are going up and HUL is considering options including price increases. The HUL stock shed 0.8% to settle at Rs 846.10 yesterday, 9 May 2016, after the company's tepid sales volume growth in Q4 March 2016 disappointed investors.

HUL's net profit rose 7.02% to Rs 1089.59 crore on 3.26% growth in total income to Rs 8027.91 crore in Q4 March 2016 over Q4 March 2015. The growth in net profit in Q4 March 2016 was adversely impacted by base effect. HUL said it had booked higher exceptional income in Q4 March 2015 from the sale of subsidiary. Net profit before exceptional items rose 13% to Rs 1031 crore in Q4 March 2016 over Q4 March 2015. The result was announced during market hours today, 9 May 2016.

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HUL said net sales of its domestic consumer business grew 3.6% on year on year basis in Q4 March 2016. The growth rate was adversely impacted due to phasing out of excise duty incentives, a one-time credit for excise duty refund in Q4 March 2015 and marginal price degrowth. Volume growth stood at 4% on year on year basis in Q4 March 2016.

HUL's net profit fell 5.39% to Rs 4082.37 crore on 3.38% growth in total income to Rs 32487.80 crore in the year ended 31 March 2016 (FY 2016) over the year ended 31 March 2015 (FY 2015).

HUL's consolidated net profit fell 6.43% to Rs 4082.42 crore on 3.23% growth in total income to Rs 33591.04 crore in the year ended 31 March 2016 (FY 2016) over the year ended 31 March 2015 (FY 2015).

The domestic consumer business grew by 4% with 6% underlying volume growth. Reported growth was impacted due to phasing out of excise duty incentives, HUL said. Profit before interest and tax (PBIT) grew by 10% with PBIT margin improving by 90 basis points. Profit after tax but before exceptional items, PAT (bei), grew by 6% to Rs 4078 crores. Net profit was at Rs 4082 crore, with the growth rate impacted by the higher exceptional income arising from subsidiary and property related sales in previous year, the company said. The strong track record of cash generation was sustained as cash from operations exceeding Rs 5000 crore for yet another year, it added.

HUL Chairman Harish Manwani commented that the company has delivered another year of competitive and profitable growth in challenging markets and a deflationary cost environment.

HUL is a leading fast moving consumer goods (FMCG) company.

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First Published: May 10 2016 | 11:49 AM IST

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