HLL: Unileverís pride - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

HLL: Unileverís pride

Apr 12, 2000

Hindustan Lever Limited (HLL) as we know is Indiaís No. 1 FMCG company. But do we know how much HLL is worth to its parent Unilever Group and how it is placed in Unileverís scheme of things. Based on annual reports of both the companies for the year ended December 31, 1999, equitymaster.com did a small study to compare the two. The results are an eye opener. So here goes...

HLL contributes around 6% to Unilever Groupís total turnover and 8.5% to its bottomline, implying that it earns better margins as compared to its parent. HLLís net profit margin is a hefty 45% more than that of Unilever. It also gives much better returns to investors. The companyís return on net worth stands at a healthy 51% compared to 38% for Unilever.

1 Pound = Rs 69.18

(Rs bn) Unilever
Group
HLL HLL as a %
of Unilever
Turnover 1,867 109 5.8
Other Income 20 3 16.2
Staff Costs 266 6 2.2
Advertising 244 7 2.9
PAT 126 11 8.5
NPM (%) 6.8 9.8  
Advertising as a % to operating costs 15% 8%  
Advertising as a % to turnover 13% 7%  
Net Worth 334 21 6.3
RONW (%) 37.8 50.9  

HLL is notorious for being the top advertising spender in India, with the largest distribution and marketing network to back it up. But its ad spends donít come anywhere near that of its parent. Unilever spends around 13% of its turnover on advertising and promotions compared to HLLís Ďconservativeí 7% (which in India would qualify as one of the largest).

Interestingly, while foods is the largest contributor to Unileverís turnover (about 50%), home care and cleaning products contribute a lionís share of 36% to HLLís current turnover. Foods form only 26% of HLLís turnover. Now we know why HLL has identified foods as its future growth area.

1 Pound = Rs 69.18

(Rs bn) Unilever
Group
HLL HLL as a %
of Unilever
Turnover by operations      
Foods (oil, dairy, bakery, frozen foods, culinary) 934 28 3.0
Home care & cleaning products 415 39 9.4
Personal care 486 18 3.6
Foods as a % of total turnover 50% 26%  
Home care & cleaning products as a % of total turnover 22% 36%  
Personal care as a % total turnover 26% 16%  


Equitymaster requests your view! Post a comment on "HLL: Unileverís pride". Click here!

  

More Views on News

HUL 2019-20 Annual Report Analysis (Annual Result Update)

Aug 6, 2020 | Updated on Aug 6, 2020

Here's an analysis of the annual report of HUL for 2019-20. It includes a full income statement, balance sheet and cash flow analysis of HUL. Also includes updates on the valuation of HUL.

HUL Announces Quarterly Results (1QFY21); Net Profit Up 7.2% (Quarterly Result Update)

Jul 22, 2020 | Updated on Jul 22, 2020

For the quarter ended June 2020, HUL has posted a net profit of Rs 19 bn (up 7.2% YoY). Sales on the other hand came in at Rs 106 bn (up 4.4% YoY). Read on for a complete analysis of HUL's quarterly results.

HUL Announces Quarterly Results (4QFY20); Net Profit Down 1.2% (Quarterly Result Update)

May 4, 2020 | Updated on May 4, 2020

For the quarter ended March 2020, HUL has posted a net profit of Rs 15 bn (down 1.2% YoY). Sales on the other hand came in at Rs 90 bn (down 9.4% YoY). Read on for a complete analysis of HUL's quarterly results.

HUL 2018-19 Annual Report Analysis (Annual Result Update)

Jun 7, 2019 | Updated on Jun 7, 2019

Here's an analysis of the annual report of HUL for 2018-19. It includes a full income statement, balance sheet and cash flow analysis of HUL. Also includes updates on the valuation of HUL.

More Views on News

Most Popular

How the 8-Year Cycle Can Help Identify Multibaggers (Fast Profits Daily)

Sep 11, 2020

This is how you can apply the greed and fear cycle in the market to pick stocks.

Why am I Recommending Caution? (Fast Profits Daily)

Sep 9, 2020

This is why I have changed my short-term view on the market.

Why We Picked This Small-cap Stock for Our Hidden Treasure Subscribers (Profit Hunter)

Sep 17, 2020

This leading household brand will profit big time in a post covid world.

This Could Be the Best September for Auto Stocks (Profit Hunter)

Sep 11, 2020

Here's why I think this month could be a great for auto stocks.

More

Covid-19 Proof
Multibagger Stocks

Covid19 Proof Multibaggers
Get this special report, authored by Equitymaster's top analysts now!
We will never sell or rent your email id.
Please read our Terms

HUL SHARE PRICE


Sep 22, 2020 (Close)

TRACK HUL

HUL - GODREJ CONSUMER COMPARISON

COMPARE HUL WITH

MARKET STATS