Food sector: HLL trims growth - 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?  

Food sector: HLL trims growth

Aug 14, 2001

The Indian food and beverages sector reported a reasonable performance in the June quarter considering the difficult market conditions. In a sample that comprised Hindustan Lever, SmithKline Beecham, Nestle, Cadbury, Britannia and Tata Tea, the topline recorded a 4% growth but the sample bottomline surged by nearly 44%.

(Rs m) June Q01 June Q02 Change
Net sales 41,116 42,719 3.9%
Other Income 866 1,069 23.5%
Expenditure 35,850 36,619 2.1%
Operating Profit (EBDIT) 5,267 6,100 15.8%
Operating Profit Margin (%) 12.8% 14.3%  
Interest 160 129 -19.3%
Depreciation 599 623 4.0%
Profit before Tax 5,374 6,418 19.4%
Tax 1,490 1,631 9.5%
Extraordinary net income 240 1,138 374.8%
Profit after Tax/(Loss) 4,124 5,925 43.7%
Net profit margin (%) 10.0% 13.9%  
Diluted No. of Shares (eoy) (m) 2462.2 2462.2  
Diluted Earnings per share* 6.7 9.6  
*(annualised)      
Current P/e ratio   24.5  

The huge 44% jump in net profits however, includes Rs 1,138 m that these companies earned as extraordinary income. If we take out the extraordinary income effect from the bottomline, the growth is around 23% YoY. A large part of the extraordinary income has been contributed to the sector sample by HLL.

The sector's operating margins improved by 150 basis points to 14.3%. This came on the back of cost cutting and improving efficiencies. With tough market conditions facing them, the sector stalwarts seemed to have concentrated on controlling costs and reducing the debt burden to maintain bottomline growth.

Excluding HLL's numbers, the topline growth for the sample was a much better 8.8% and the bottomline growth stood at nearly 30% (excluding extraordinary income). This data further underlines the belief that since HLL has achieved a sizeable scale of operations, going forward, it may not find it easy to achieve double digit topline growth, unless it chooses to grow inorganically.

With the rain gods smiling, a better second half of FY02 is not ruled out. Thus these numbers may look better towards FY02 close. At the current market caps, the sector sample trades at a P/e of 24.5 times annualised June quarter earnings.


Equitymaster requests your view! Post a comment on "Food sector: HLL trims growth". Click here!

  

More Views on News

RADICO KHAITAN Share Price Down by 5%; BSE 500 Index Down 1.2% (Market Updates)

Sep 21, 2020 | Updated on Sep 21, 2020

RADICO KHAITAN share price is trading down by 5% and its current market price is Rs 457. The BSE 500 is down by 1.2%. The top gainers in the BSE 500 Index are GSK CONSUMER (up 5.1%) and SYNDICATE BANK (up 3.8%). The top losers are RADICO KHAITAN (down 5.3%) and SHRIRAM CITY UNION (down 5.9%).

TATA COFFEE Share Price Down by 5%; BSE 500 Index Down 1.0% (Market Updates)

Sep 21, 2020 | Updated on Sep 21, 2020

TATA COFFEE share price is trading down by 5% and its current market price is Rs 112. The BSE 500 is down by 1.0%. The top gainers in the BSE 500 Index are GSK CONSUMER (up 5.1%) and SYNDICATE BANK (up 3.8%). The top losers are TATA COFFEE (down 5.3%) and BIRLA CORPORATION (down 6.0%).

VENKYS (I) LIMITED Announces Quarterly Results (1QFY21); Net Profit Down 24.0% (Quarterly Result Update)

Sep 15, 2020 | Updated on Sep 15, 2020

For the quarter ended June 2020, VENKYS (I) LIMITED has posted a net profit of Rs 470 m (down 24.0% YoY). Sales on the other hand came in at Rs 5 bn (down 40.2% YoY). Read on for a complete analysis of VENKYS (I) LIMITED's quarterly results.

RUCHI SOYA INDUSTRIES Announces Quarterly Results (1QFY21); Net Profit Down 12.5% (Quarterly Result Update)

Sep 1, 2020 | Updated on Sep 1, 2020

For the quarter ended June 2020, RUCHI SOYA INDUSTRIES has posted a net profit of Rs 123 m (down 12.5% YoY). Sales on the other hand came in at Rs 30 bn (down 2.2% YoY). Read on for a complete analysis of RUCHI SOYA INDUSTRIES's quarterly results.

BRITANNIA 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 BRITANNIA for 2019-20. It includes a full income statement, balance sheet and cash flow analysis of BRITANNIA. Also includes updates on the valuation of BRITANNIA.

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.

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.

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.

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

COMPARE COMPANY

MARKET STATS