Hindustan Unilever Sees Strong Growth In Q4FY13

Hindustan Unilever (HUL) has come out with its Q4FY13 numbers. The results have been on the better side and have beaten the street’s expectations. For the quarter, HUL’s topline grew by 12.5% on a YoY basis to stand at Rs 6,367.1 crore as compared to Rs 5,660 crore for Q4FY12. The operating profit margin went up by 50 basis points YoY to 15%, which is higher than the street’s expectations of 14%. Its EBITDA grew by 16.7% on a YoY basis to touch Rs 972 crore for the quarter.

The icing on the cake is that the company has declared a final dividend of Rs 6 per share, taking the dividend to Rs 18.50 per share for FY13. At the current price of the shares, the dividend yield stands at 3.72%.

The results can be attributed to the higher volumes, which have grown at a decent pace of 6% in the March 2013 quarter as against the market expectation of 4-5%. Also, during the quarter, the Domestic Consumer business grew at 13%, and both Home and Personal Care (HPC) and Foods & Beverages (F&B) registered double-digit growth.

Let us take a look at the performance of the various segments of the company:

Soaps & Detergents: This segment has generated a growth of 13% backed by the skin cleansing segment, which saw double-digit volume growth. The quarter witnessed price deflation as the benefit of the lower commodity cost was passed on to consumers. The liquids portfolio was further strengthened with the re-launch of the Dove Bodywash range.

Personal Products: This segment witnessed a growth of 12%, which can be attributed to better performance in hair and oral care. In skin, Ponds and Lakme did particularly well during the quarter. The face wash portfolio was further strengthened with two new differentiated offerings - Lakme Nourishing Glow Clean Up and Ponds White Beauty Tan Removal Scrub. Hair care had a very good quarter with strong volumes-led double-digit growth. Clinic Plus grew well after its re-launch. Oral Care registered volumes-led double-digit growth driven by a further step up in both Close Up and Pepsodent. A range of premium toothbrushes were launched under Pepsodent Expert Protection.

Beverages: This segment witnessed robust 18% growth across the portfolio. Tea delivered another strong performance, with double-digit growth across all key brands.

Packaged Foods: This segment went up by 7%. Kissan Ketchups continued on a strong growth path, while the Knorr soups portfolio saw an acceleration.

As a whole, the results have been on the better side, which can be gauged by looking at the price movement of the stock. It closed at Rs 497.60, gaining almost 7% during the day. The stock is currently trading at a PE of 28.07x.