HUL Q4 Results 2022 – Profit Up by 8.5% vs Previous Quarter

According to Forbes, HUL is the most innovative company in India and 8th globally.

HUL’s purpose is to make sustainable living commonplace.

Hindustan Unilever Limited (HUL) is India’s largest fast-moving consumer goods corporation, with a history dating back over 85 years.

Nine out of ten Indian households utilize their products on a daily basis, providing them with a wonderful opportunity to build a better future.

Its portfolio includes leading household brands such as Lux, Lifebuoy, Surf excel, Rin, Wheel, Glow & Lovely, Pond’s, Vaseline, Lakmé, Dove, Clinic Plus, Sunsilk, Pepsodent, Closeup, Axe, Simple, Love Beauty Planet, TRESemmé, Brooke Bond, Bru, Knorr, Kissan, Kwality Wall’s, Horlicks and Pureit.

With 50+ brands spanning categories such as fabric solutions, home and hygiene, life essentials, skin cleansing, skincare, hair care, color cosmetics, oral care, deodorants, tea, coffee, ice cream & frozen desserts, foods and health food drinks, the Company is a part of the everyday life of millions of consumers across India.

HUL has maintained its reputation by consistently increasing profits from previous quarters. In Q4, the company’s standalone profit was Rs. 2,327 crore, up 8.5 percent from Rs. 2,143 crore in the previous quarter.

Despite significant inflation, HUL’s Q4 result exceeded expectations. The result was greater than the average profit projected by analysts in a Bloomberg survey of Rs. 2,200 crore.

The revenues of HUL for the full year increased 11.3 percent to Rs. 51,193 crore compared to the revenues of Rs. 45,996 crore for FY21.

Foods & Refreshment business of the company grew 5 percent on year on a high base of last year with all business segments within this business witnessing strong traction.

Source – Bloomberg

HUL Q4 Results 2022 – Highlights

• HUL has performed above expectations despite high inflation brought on by high energy prices, shattered supply chains, and the Ukraine conflict.
  
• HUL company’s turnover for the financial year ended March 31, 2022, stood at Rs. 50,336 crore as against a turnover of Rs. 45,311 crore for the financial year ended March 31, 2021. 
  
• The company’s operating margin remained healthy at 24.6 per cent. Its net sales jumped 10 per cent to Rs. 13,190 crore for the March 2022 quarter. 
  
• Its EBITDA stood at Rs. 3,245 crore during the March 2022 quarter, a jump of 10 per cent against the year-ago quarter.
  
• High inflation impacted the skin care and colour cosmetics business, which had a muted quarter with the fall in discretionary consumption.
  
• The company has recommended a final dividend of Rs. 19 for the financial year ended March 31, 2022 on equity shares of Rs. 1 each.
  
• Its EBITDA stood at Rs. 3,245 crore during the March 2022 quarter, a jump of 10 per cent against the year-ago quarter.
  
• HUL’s quarterly revenue increased by 11% amounting to Rs. 13,462, bringing the total revenue to Rs 50,336 crores.

HUL Q4 Results 2022 – Working Capital Ratio Analysis

Source – Bloomberg

• Days sales outstanding have decreased from 16.01 days in Q2-22 to 14.14 days in Q4-22. This implies that the average number of days it takes for the company to collect payment following a sale has been reduced.
  
• Increased accounts receivable turnover shows that the organisation is handling credit more efficiently. The greater your receivable turnover ratio, the better, because it indicates that customers pay on time and the organisation collects debts efficiently.
  
• The number of days inventory outstanding decreased from 59.08 in Q2-21 to 54.38 in Q4 22. This means that the average number of days the company maintains inventory before turning it into revenues has decreased.
  
• In Q4 HUL’s cash conversion low numbers indicate a more effectively managed operation – the money isn’t tied up for long in inventory or accounts receivable.
  
• The accounts payable turnover ratio tells creditors about a company’s short-term liquidity and, to some extent, its creditworthiness. A high ratio shows that suppliers are paid promptly for credit purchases. The increase in HUL’s ratio reflects the company’s efficiency in repaying its short-term loans.
  
• HUL has purchased more things than it has sold, as seen by the increase in inventory. The main advantage of having too much inventory is that it boosts consumer satisfaction. Having surplus inventory allows the company to promptly deliver things to your clients.

HUL Q4 Segment-wise Performance

Source – BSE

HUL has had significant growth in all of its business segments.

• HUL Q4 results 2022 showed a 24 percent increase in the Homecare section of the company, which totaled Rs. 4,750 crore.
  
• HUL’s Foods and Refreshment division grew 5% on a very high prior-year comparable, thanks to strong results in beverages, foods, and ice cream.
  
• HUL’s Beauty & Personal Care division increased at a rate of 4%, which was competitive. Pricing drove double-digit growth in Skin Cleansing, which was led by good success in ‘Lux,’ ‘Dove,’ and ‘Pears.’
  
• HUL’s revenue from other sources, which includes exports and consignments, increased by 301% year on year to Rs. 3020 million in Q4.

Although volume growth remained flat, the company continues to outperform the market in terms of value and volume market share. Turnover increased by 10% throughout the quarter, despite flat Underlying Volume Growth.

HUL Management Comments

“In challenging circumstances, we have grown competitively and protected our business model by maintaining margins in a healthy range. I am also pleased that we have become a Rs. 50,000 crore turnover company in this fiscal. Our consistent performance is reflective of our strategic clarity, strength of our brands, operational excellence, and dynamic financial management of our business. While there are near term concerns around significant inflation and slowing market growth, we are confident of the medium to long term prospects of the Indian FMCG sector and remain focused on delivering a Consistent, Competitive, Profitable and Responsible growth.”
– Sanjiv Mehta, CEO and Managing Director.

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