X

Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.


Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
HLL's 2QFY01: Old habits die hard - Views on News from Equitymaster
 
 
  • PRINT
  • E-MAIL
  • FEEDBACK
  • A  A  A
  • Jul 28, 2000

    HLL's 2QFY01: Old habits die hard

    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

    Marico: Earnings Hit by Lower Volumes and Firming Input Prices (Quarterly Results Update - Detailed)

    Aug 9, 2017

    While GST implementation brought down volumes and profitability in the short run, Marico remains optimistic in the long run.

    HUL: A Slow End to a Dull Year... (Quarterly Results Update - Detailed)

    May 9, 2016 | Updated on May 11, 2016

    HUL announced its results for the quarter and year ended March 2016. While revenues rose by 4% YoY, net profits increased by 7% YoY.

    Hindustan Unilever: Deflationary Pressures Curb Growth (Quarterly Results Update - Detailed)

    Jan 21, 2016

    HUL announced its results for the quarter ended December 2015. While revenues were up by 3% YoY, profits came in lower by 22% YoY.

    Hindustan Unilever: Fails to meet expectations (Quarterly Results Update - Detailed)

    Oct 16, 2015

    HUL announced its results for the quarter ended September 2015. While revenues were up by 4% YoY, profits came in lower by 3% YoY.

    More Views on News

    Most Popular

    This Small Cap Can Drive Chinese Players Out of India (and Make a Fortune in the Process)(The 5 Minute Wrapup)

    Aug 17, 2017

    A small-cap Indian company with high-return potential and blue-chip-like stability is set to supplant the Chinese players in this niche segment.

    The Most Important Innovation in Finance Since Gold Coins(Vivek Kaul's Diary)

    Aug 10, 2017

    Bill connects the dots...between money and growth, real money and real resources, gold and cryptocurrencies...and between gold, cryptocurrencies, and time.

    Signs of Life in the India VIX(Daily Profit Hunter)

    Aug 12, 2017

    The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.

    Bitcoin Continues Stellar Rise(Chart Of The Day)

    Aug 10, 2017

    Bitcoin hits an all-time high, is there more upside left?

    5 Steps To Become Financially Independent(Outside View)

    Aug 16, 2017

    Ensure your financial Independence, and pledge to start the journey towards financial freedom today!

    More
    Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
    Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

    LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

    SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

    Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
    Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407
     

    Become A Smarter Investor In
    Just 5 Minutes

    Multibagger Stocks Guide 2017
    Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
    We will never sell or rent your email id.
    Please read our Terms

    HIND. UNILEVER SHARE PRICE


    Aug 22, 2017 (Close)

    TRACK HIND. UNILEVER

    • Track your investment in HIND. UNILEVER with Equitymaster's Portfolio Tracker. Set live price alerts, get research alerts and more. Get access now...
    • Add To MyStocks

    MORE ON HIND. UNILEVER

    HIND. UNILEVER - P&G HYGIENE COMPARISON

    Compare Company With Charts

    COMPARE HIND. UNILEVER WITH

    MARKET STATS