HLL: A performance par excellence - 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: A performance par excellence

Jul 27, 1999

HLL has posted a turnover of Rs 27.5 bn (up 11% YoY) and a net profit of Rs 2.26 bn (up 25% YoY) for the second quarter ended 30th June 1999. The company has declared an interim dividend of Rs 12 per share. It has improved its market share in most of the product categories it operates in. Hindustan Lever Limited (HLL) is the largest consumer products company in India. HLL's business portfolio comprises soaps, detergents, personal products, food products and frozen desserts.

Despite the dull domestic economic conditions, HLL has been able to post a healthy rise in turnover. The surge in agricultural production (up by over 7% in FY99), boosted incomes in rural India, and consequently spurred the demand for the company's products. HLL, which had launched a rural thrust program a few years back, 'Project Bharat', in anticipation of a surge in rural demand, seems to be reaping the benefits of being the first mover.

Operating margins at HLL moved up from 10.3% to 11.4% in the second quarter. While net sales moved up by 10.8%, expenditure increased by only 9.9%. The other factor that contributed to the growth in operating margins was the 36% jump in other income to Rs 560 mn.

The Russian crisis and the difficult international trading conditions adversely affected the exports of rice, hygiene and personal care products and beverages. HLL has however managed to post a growth in export turnover by entering new markets and introducing new products.

The current spurt in demand for the company's products is aided by low inflation and higher rural incomes. However, given the volatility in domestic agricultural production, it is uncertain whether growth at HLL would continue to be led by the rural markets. Moreover, if inflation resurfaces, the fall in purchasing power might prove to be a stumbling block for the company. In such a scenario, the company would generate profits by cost cutting rather than price increases.

However, HLL is well positioned to capitalise on the growth opportunities that would emerge if there were a general economic upturn. As in the past, given the company's cash chest, growth by pursuing an aggressive merger and acquisition strategy is always a possibility.

Market View:
The stock has been rated as a 'BUY' by analysts because of its high management quality, and strong brands. Moreover, the company's successful marketing thrust into the rural markets, which has given it access to a largely untapped market of approximately 650 mn people, has also lent support to this rating.

Equitymaster requests your view! Post a comment on "HLL: A performance par excellence". Click here!

  

More Views on News

HUL Announces Quarterly Results (3QFY21); Net Profit Up 18.9% (Quarterly Result Update)

Jan 28, 2021 | Updated on Jan 28, 2021

For the quarter ended December 2020, HUL has posted a net profit of Rs 19 bn (up 18.9% YoY). Sales on the other hand came in at Rs 119 bn (up 20.9% YoY). Read on for a complete analysis of HUL's quarterly results.

HUL Announces Quarterly Results (2QFY21); Net Profit Up 8.7% (Quarterly Result Update)

Oct 21, 2020 | Updated on Oct 21, 2020

For the quarter ended September 2020, HUL has posted a net profit of Rs 20 bn (up 8.7% YoY). Sales on the other hand came in at Rs 114 bn (up 16.1% YoY). Read on for a complete analysis of HUL's quarterly results.

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 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

A Critical Update on the Market (Fast Profits Daily)

Mar 30, 2021

In this video, I'll tell you why I am recommending caution in the market at this time.

My Recent Recommendation Will Profit from the Global Supply Chain Crisis (Profit Hunter)

Mar 31, 2021

A tiny chemical company, started in the Licence Raj era, is a great example of a new wealth creating opportunity.

My Stock Trading Strategy (Fast Profits Daily)

Mar 31, 2021

In this video I'll show you exactly how I go about picking stocks for trading.

What You Need to Find Hundred Baggers (Profit Hunter)

Mar 30, 2021

100 baggers of the last decade share this common trait. Here's how to use it to nail future multibaggers.

More

India's #1 Trader
Reveals His Secrets

Secret To Increasing Your Trading Profits Today
Get this Special Report,
The Secret to Increasing Your Trading Profits Today, Now!
We will never sell or rent your email id.
Please read our Terms

HUL SHARE PRICE


Apr 12, 2021 (Close)

TRACK HUL

COMPARE HUL WITH

MARKET STATS