“HUL margin came flat on a year-on-year basis. So, the 50 bps improvement which has happened is really a good thing. We will have to wait for the management commentary on how they will try and manoeuvre the current inflationary situation,” says Shirish Pardeshi, FMCG analyst, Centrum Broking.
What is your view on HUL Q3 results?
The numbers came in line with our estimates. While we were expecting volume growth would be a little higher, the home care business has done really well and has reported almost 23% growth, while in the base quarter there was a decline.
Our expectation was a little higher volume growth. We will have to check what exactly has happened because the volume growth is primarily driven by the food business. The second part is the beauty and personal care business which has grown almost 7% and is in line. The margin came flat on a year-on-year basis. So, the 50 bps improvement which has happened is really a good thing. We will have to wait for the management commentary on how they will try and manoeuvre the current inflationary situation.
In terms of the demand condition, last quarter the management was highlighting there was some weakness in the rural growth. We will have to see in the current context, what is the management’s assessment of rural growth.
The last point is that a lot of expectations were built around the GlaxoSmithKline business which it acquired and the integration has already happened. So there is the next leg of growth because this consolidation has happened at the front end.
My personal view is that a forward statement from the management on how the growth will pan out and whether it will even out will be important because a lot of things have been done at the store activation level and distribution in terms of penetration growth to develop the Horlicks business.
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