HLL's 2QFY01: Old habits die hard - 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's 2QFY01: Old habits die hard

Jul 28, 2000

India's largest consumer products company Hindustan Lever (HLL) has reported a YoY 27% jump in its net profits to Rs 2.9 bn on a marginal topline growth of 5% in the 2QFY01. The higher growth in the profit was mainly due to 71% reduction in the interest expenses and improvement in the operating margins. The topline growth of the company was powered by higher growth rate in the branded staple food business. However the sales growth has been dampened by flat ice cream sales and a decline in oils and fats business.

(Rs m) 2QFY00 2QFY01 Change
Sales 27,528 28,800 4.6%
Other Income 555 777 39.9%
Expenditure 24,527 25,340 3.3%
Operating Profit (EBDIT) 3,000 3,460 15.3%
Operating Profit Margin (%) 10.9% 12.0%  
Interest 70 20 -71.3%
Depreciation 427 330 -22.8%
Profit before Tax 3,059 3,887 27.1%
Tax 791 1,010 27.7%
Profit after Tax/(Loss) 2,268 2,877 26.9%
Net profit margin (%) 8.2% 10.0%  
No. of Shares (eoy) (m) 2,196 2,196  
Diluted number of shares 2,196 2,196  
Diluted Earnings per share* 4.1 5.2  
*(annualised)      

During the first half its home & personal care business grew by 6%, tea business rebounded with a healthy growth of 16% and popular foods surge ahead with impressive growth of 29%. The company is driving growth through leading market upgradation by focussing support and innovation behind its key brands. It has launched several new products during the second half in its key categories. The prominent among them are Lux skincare range, Lipton Ice tea, Dalda Active, Aim toothpaste, Impulse deodorant range and new flavours in Kisan ketchup.

The company continued its growth story by improving its ROCE to 63.1% in 1HFY01 (58.7% in 1HFY00) and RONW to 48.8% (47.3% in 1HFY00). As part of its project millennium it has plans to identify new sources of business like the laundry business and beauty saloons opened by it in the current year. It will help the company in generating volume growth. Further as part of its vision to meet the everyday needs of the people everywhere, the company has plans to strengthen its rural focus by reaching the interiors of Indian village.

HLL's future growth will be boosted by efficient supply chain management which will help the company in improving its profit margins. This will be achieved through marketing cost efficiencies, global sourcing, rural coverage and reduction in the freight cost. The company's major challange lies in improving its volume growth and building operational efficiencies which will in turn help it to improve shareholder's wealth further.

At the current market price of Rs 237, HLL is trading at a PER of 45 times its 2QFY01 annualised earnings with a market cap to sales ratio of 4.5 times. The reason for its premium valuations are its ability to grow quarter over quarter with innovative new products and cost efficiencies in the scenario of increasing competition.


Equitymaster requests your view! Post a comment on "HLL's 2QFY01: Old habits die hard". 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

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.

My Top Stock to Buy in this Market Selloff (Profit Hunter)

Sep 22, 2020

The recent correction offers a great opportunity to buy this high conviction smallcap stock.

What Do the Charts Say About Buying Smallcaps Now? (Fast Profits Daily)

Sep 18, 2020

Everyone seems to be excited about buying smallcaps now...but is it the right thing to do? What do the charts tell us? Find out in this video...

How Much Money Do You Need to Be a Professional Trader? (Fast Profits Daily)

Sep 17, 2020

In this video I'll answer a question I get asked often: How much capital do I really need to trade the markets for a living? Let's find out...

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 25, 2020 (Close)

TRACK HUL

COMPARE HUL WITH

MARKET STATS