Underlying Volume Growth (UVG)
3%
-3pp YoY
UVG was 3% in Q1 FY24 vs 6% in Q1 FY23, reflecting a high base and transition to lower price growth.
HINDUNILVR
Consumer
21 Jul 2023
Hindunilvr Ltd — Q1 FY24
HUL reported a resilient Q1 FY24 with underlying sales growth of 7% (UVG 3%) on a high base, despite a challenging operating environment.
Financial stats pending filing verification
2-Minute Summary
✦ AI-Generated from Full Transcript
HUL reported a resilient Q1 FY24 with underlying sales growth of 7% (UVG 3%) on a high base, despite a challenging operating environment. EBITDA margin improved 40 bps YoY to 23.6%, while PAT grew 8% to INR 2,472 crore. More than 75% of the business gained market share. The company is navigating a transition period as commodity inflation moderates, leading to price reductions and increased competitive intensity. Management expects price growth to be near flat or marginally negative in the next couple of quarters, with volume-led growth. Rural recovery is underway but weather risks (El Niño) remain a key watch. The focus is on rebuilding gross margins and investing in A&P to maintain share of voice. Risk: delayed volume recovery due to trade destocking and consumer pantry adjustments.
HUL ने पहली तिमाही (अप्रैल-जून 2023) में अच्छा प्रदर्शन किया। मुश्किल हालात के बावजूद बिक्री में 7% की बढ़ोतरी हुई। कंपनी का मुनाफा (PAT) 8% बढ़कर 2,472 करोड़ रुपये हो गया। 75% से ज्यादा उत्पादों की बाजार हिस्सेदारी बढ़ी है। कच्चे माल की कीमतें कम हो रही हैं, जिससे कंपनी को अपने उत्पादों के दाम घटाने पड़ रहे हैं और मुकाबला बढ़ रहा है। आने वाले महीनों में कीमतें स्थिर या थोड़ी कम रह सकती हैं, और बिक्री ज्यादा मात्रा पर निर्भर करेगी। गांवों में मांग सुधर रही है, लेकिन मौसम (अल नीनो) का खतरा बना हुआ है। कंपनी मुनाफा बढ़ाने और विज्ञापन पर खर्च करने पर ध्यान दे रही है।
Key Numbers
Gross Margin
49.2%
+140bps QoQ
Gross margin improved 140 bps sequentially to 49.2%, driven by softening commodity costs.
A&P Spend as % of Sales
~10%
+300bps vs 3 quarters ago
A&P spend increased to ~10% of sales from ~7% three quarters ago, as media intensity normalizes.
Market Share Winning Business
75%+
flat
More than 75% of HUL's business gained market share in both value and volume terms.
Management Guidance
Price growth to be near flat or marginally negative in next 2 quarters
If commodities remain at current levels, HUL expects price growth to be near flat or marginally negative, with growth fully led by volume.
Management guidance revenueVolume growth momentum to be sustained
Management expects to sustain volume growth momentum despite transition, supported by price reductions and A&P investments.
Management guidance growthGross margin to be rebuilt and invested in A&P
Focus on rebuilding gross margins and investing competitively behind A&P; EBITDA margin will be an outcome.
Management guidance marginsKey Risks
Weather uncertainty and El Niño impact
El Niño has set in early, potentially impacting the latter part of the monsoon, which could affect rural demand and agri output.
high · management_commentaryResurgence of small and regional players
Moderating commodity prices have led to increased competition from small/regional players, particularly in mass segments and specific regions.
medium · management_commentaryDelayed volume recovery due to trade destocking
Trade destocking of high-priced inventory and consumer pantry adjustments may delay volume recovery by 2-3 quarters.
medium · management_commentarySustained inflation in certain commodities
Coffee, cereals, and cleaning powder continue to see high inflation, impacting margins in the Foods & Refreshment segment.
medium · analyst_questionNotable Quotes
We've delivered this quarter a resilient and competitive performance, which was again marked by challenging operating environment.
If commodities remain where they are, we expect our price growth to be near flat or marginally negative.
The only single biggest risk we called out is weather.
Frequently Asked Questions
What was Hindunilvr's revenue in Q1 FY24?
Hindunilvr reported revenue of — in Q1 FY24, representing a — change compared to the same quarter last year.
What guidance did Hindunilvr management give for FY25?
Price growth to be near flat or marginally negative in next 2 quarters: If commodities remain at current levels, HUL expects price growth to be near flat or marginally negative, with growth fully led by volume. Volume growth momentum to be sustained: Management expects to sustain volume growth momentum despite transition, supported by price reductions and A&P investments. Gross margin to be rebuilt and invested in A&P: Focus on rebuilding gross margins and investing competitively behind A&P; EBITDA margin will be an outcome.
What are the key risks for Hindunilvr in FY25?
Key risks include Weather uncertainty and El Niño impact — El Niño has set in early, potentially impacting the latter part of the monsoon, which could affect rural demand and agri output.; Resurgence of small and regional players — Moderating commodity prices have led to increased competition from small/regional players, particularly in mass segments and specific regions.; Delayed volume recovery due to trade destocking — Trade destocking of high-priced inventory and consumer pantry adjustments may delay volume recovery by 2-3 quarters.; Sustained inflation in certain commodities — Coffee, cereals, and cleaning powder continue to see high inflation, impacting margins in the Foods & Refreshment segment..
Did Hindunilvr meet its previous quarter's guidance?
Scorecard data is being built as historical quarters are processed.
Where can I read the full Hindunilvr Q1 FY24 concall transcript?
The full earnings conference call transcript or source release is available on the linked source material. This page provides an AI-generated summary with filing verification status shown on the financial stats.