Hindustan Unilever (HUL) chief financial officer Ritesh Tiwari stated during the company’s Q4 earnings news conference on April 24 that operating margins will continue to rise modestly over the medium-to-long term, boosted by a stronger product mix.
According to HUL’s most recent fiscal fourth quarter results, operating profitability was further squeezed by strong competition and a downturn in demand, resulting in an EBITDA margin (earnings before interest, tax, depreciation, and amortisation) of 23.4 percent, a 30 basis point year-over-year decline. Over the same period, gross margins increased by 350 basis points year over year to 51.3 percent.
Furthermore, Tiwari stated, HUL’s growth recipe would consist of modest margin improvement combined with increased expenditures in future growth categories. The addition of premium products is part of the improved product mix.
Additionally, the business has identified six growth categories: light moisturizers, sun care, masstige, weatherproof body care, facial cleansers, and serums. According to Tiwari, the six growth regions will concentrate on urban markets.
The January–March quarter, HUL reported a 6% decline in standalone net profit, coming in at Rs 2,406 crore. The decline exceeded analysts’ estimates in a Moneycontrol survey. The company’s income from beauty and personal care, the main division, fell 2.7% during the quarter, while sales only slightly increased to Rs 14,693 crore.
Based on a revenue estimate of Rs 14,913 crore, analysts had predicted a profit of Rs 2,435 crore, on average, across nine brokerage forecasts.
