HUL Q1 FY24 net profit up 8% at Rs 2,472 cr; focus on investing in Ads

Hindustan Unilever Limited (HUL) delivered a resilient and competitive performance in a challenging environment as it announced its results for the first quarter ended June 20, 2023. Profit after tax (PAT) was up 8% YoY at Rs 2,472 crore. EBITDA margin at 23.6% was up 40 bps YoY.

The conglomerate remains focused on building back gross margin, as well as investing competitively in Advertising & Promotions. HUL reported Underlying Sales Growth (USG) of 7% and Underlying Volume Growth (UVG) of 3%.

Home Care: Double digit growth on a high base

Home Care delivered another quarter of strong performance with 10% revenue growth and mid-single digit UVG. Both Fabric Wash and Household Care grew double-digit led by focused market development actions and premiumisation. Comfort In Wardrobe Premium Fragrance Hangers, Vim Shudhham Cleaning Spray and Gel were launched in the quarter.

Beauty & Personal Care: Volume led growth

Beauty & Personal Care delivered 4% revenue growth with mid-single digit UVG. Skin Care and Colour Cosmetics grew double-digit on the back of strong performance in premium portfolio. Hair Care delivered mid-single digit UVG led by Tresemme, Indulekha and Clinic Plus. Skin Cleansing had a modest volume-led growth with Lux and Hamam continuing to outperform. Further price reductions were taken in soaps portfolio in this quarter. Oral Care delivered strong double-digit growth led by Closeup. During the quarter, Dove Men+ Care range, Indulekha Soap, Pond’s Anti Pigmentation Serum were launched.

Foods & Refreshment: Steady performance led by Health Food Drinks and Food Solutions

Foods & Refreshment revenue grew 5% with near flat UVG. Tea saw modest volume led growth as the category continued to witness consumers downgrading due to higher inflation in premium teas vis-à-vis loose tea. HFD continue to grow competitively with both Horlicks and Boost performing well. Foods grew in mid-single digit led by strong performance in Ketchup and Food Solutions. Ice Cream grew in mid-single digit on an exceptionally high base. Unseasonal rains impacted Ice Cream consumption in the quarter. Horlicks Millet Biscuits, range of Knorr Chinese Sauces and Bru Cold Coffee were launched in the quarter.

Rohit Jawa, CEO and Managing Director, HUL, commented, “FMCG markets are recovering gradually although the operating environment remains challenging. In this context we have delivered a resilient and competitive performance whilst stepping up our EBITDA margin.”

Jawa further said, “In the near-term, FMCG industry will continue to witness rebalancing of price-volume growth equation and a gradual recovery in consumer demand. In this environment we will continue to provide superior value to our consumers and invest behind our brands. We remain focused on driving our long-term strategic priorities, including market development and building distinctive capabilities for the future. I am confident of the medium to long term prospects of the Indian FMCG sector and HUL’s ability to deliver a Consistent, Competitive, Profitable and Responsible growth.”