HUL posts disappointing Q2 results

FMCG major Hindustan Unilever's (HUL) announced its Q2FY16 result today, its total revenue during the quarter increased 4.1 per cent to Rs 7,955 crore compared to Rs 7639 crore in same quarter last year. HUL missed the top line and bottom line exceptions this quarter. The total expenses rose by 3.58 per cent to Rs 6705.67 crore on yearly basis due to increased in admin expenses and other expenses.

The EBITDA increased by 6.75 per cent to Rs 1326 crore. The EBITDA margin expanded by 41 per cent to 16.67 on yearly basis. The company's other income reduced by 13.97 per cent, tax expenses increased by 6.6 per cent to Rs 445.47 crore which resulted September quarter profit declined by 2.6 per cent to Rs 962.2 crore on slower growth in revenue and operational performance.

On a quarterly basis, the adjusted volume growth was 6 to 6.5 per cent during the quarter. HUL's total revenue reduced by 1.85 per cent to Rs 7955 crore, total expenses marginally increased by 0.48 per cent, its EBITDA decreased by 12 per cent, EBITDA margin contracted by 192 basis points. The net profit slumped by 9.14 per cent to Rs 962 crore against Rs 1059 crore in last quarter of the same fiscal.

During the quarter, the soaps & detergent business posted robust volume growth partially offset by price deflation. Even the personal products segment has healthy double digit growth and packaged foods continued to post double digit growth for the eighth consecutive quarter.

Also during the quarter the company has entered into an agreement for sale and transfer of its bread and bakery business on a going concern basis under the brand “modern” to Niman Foods an investor company of Everstone group.

The domestic consumer business grew at 5 per cent in September quarter, with 7 per cent underlying volume growth. The growth during the quarter continued to be impacted by phasing out of excise duty incentives and price de-growth.

Hindustan Unilever (HUL) is India's largest fast moving consumer goods company, with leadership in Home & Personal Care Products and Foods & Beverages. In Sept 2015 , its FII holdings reduced by 65 basis points to 13.91 per cent while its DII holding increased by 63 basis points to 4.81 per cent.

After posting a disappointing Q2 result, today HUL is trading at Rs 755 around 3 per cent down.