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 – On a growth path - Views on News from Equitymaster
  • E-MAIL
  • A  A  A
  • Jul 31, 2000

    HLL – On a growth path

    Hindustan Lever (HLL), India’s largest FMCG company is gearing itself to improve its earnings growth by launching several new products (including premium products) and increasing market share. The company is as confident as ever on achieving its objectives.

    HLL has been able to maintain its bottomline growth of more than 20% despite slow growth in its key operating areas. This is due to effective cost controlling, better productivity and supply chain efficiencies. The company is leveraging technology for improving efficiency. It has already started reaping benefits in terms of better working capital management and reduction in inventory.

    Due to the change of composition of turnover from low priced products to premium products, the company yielded better operating margins. With the increase in the percentage of rich population and the awareness about better hygiene, the opportunities for the company is huge to improve its topline growth.

    Mixed bag of market share...
    HLL’s market share in the toilet soap segment has reduced from 63% to 61% due to intensifying competition in the personal care market. However the company gained market share in toothbrush, hair care and its foods business due to relaunch and introduction of several new products in this segment.

    Comparative market share...
    Particulars May-00 Dec-99
    Personal Care    
    Toilet soaps 60.9% 62.7%
    Detergent powders 38.5% 38.6%
    Oral Care    
    Toothpaste 37.0% 37.0%
    Toothbrush 24.3% 21.6%
    Shampoo 70.6% 70.5%
    Hair oils 14.5% 12.1%
    Packet tea 40.0% 39.0%
    Coffee 45.0% 38.0%
    Culinary products    
    Jams 73.0% 71.0%
    Ketchup 42.0% 41.0%

    New launches...
    HLL has launched several new products during the year to increase its market reach and drive its volume growth. The company has been proactive in launching products to suit the requirements of a particular segment. In oral care it has introduced ‘AIM’, a low priced toothpaste to lead conversion from traditional products. To improve on its slow growth rate in the personal product segment it has launched among others the ‘Impulse’ range of deodorant.

    The sales growth of ice creams has been flat during the quarter due to a fiercely competitive market scenario. The company has introduced new products under its existing brand ‘Cornetto’, ‘Feast’ and ‘Max’, targeting ethnic Indian taste and preferences. This is expected to improve the ice cream sales growth. The company has also stated that its ice cream business will break even, in cash terms, this year.

    In the food business, which is showing the highest growth rate, HLL has launched Lipton ice tea, relaunched Kissan range of products and in the process of integrating the Modern Food business to accelerate growth and leverage synergies. Its ‘Annapurna’ range of food products continues to grow robustly.

    It is also venturing in the branded service market with the launch of Surf Laundry Service and Lakme Beauty Salons. The entry into the service sector being is an entirely new concept and will take some time to roll out nationally. The company is aiming to participate in the services sector, which accounts for half the Indian economy and is currently growing at well over 8%.

    The initiatives taken by the company to generate volume growth is expected to earn good returns in the long term. This is also evident from returns it has generated year over year. In the first half of the current year, its RONW increased to 48.8% (47.3%) and ROCE improved to 63.1% (58.7%). At the current market price of Rs 237, HLL quotes at a P/E multiple of 45 times its 2QFY00 annualised earnings.



    Equitymaster requests your view! Post a comment on "HLL – On a growth path". 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

    A 'Backdoor' to Multibaggers: It's Like Investing in Asian Paints Ten Years Ago(The 5 Minute Wrapup)

    Aug 10, 2017

    Don't miss these proxy bets on growing companies or in a few years you will be looking back with regret.

    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!

    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


    Aug 22, 2017 (Close)


    • 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



    Detailed Quarterly Results With Charts