HUL announced a good and steady set of earnings for Q1FY21. Its net profit for the quarter rose 7% (YoY) at Rs.1881 crore and this was on a 4% rise in sales at Rs.10,406 crore. This is a very good show despite the Covid disruption and to a large extent, the completion and integration of GSK Consumer’s brands – Horlicks, Boost, Maltova and Viva has helped boost the bottomline. The company stated in a post-earning conference that but for these brands, volumes actually contracted by 8% in Q1 and revenue would have come down 7%.
Its home care segments showed a 2% drop in topline, while personal care dropped 12%. Food & refreshments did very well with a 52% rise
The Board recommended a special dividend of Rs.9.50/share (Re.1 FV).
On its near-term outlook, the company said that it was difficult to estimate market growths and / or consumer demand. It expects volatility in input costs and currency to continue and liquidity pressures to remain elevated.
The market buys on expectations and sells on news – HUL, which had closed yesterday at Rs.2319.10, opened at the day’s high point at Rs.2340 and from there, profit booking pushed the stock price down to Rs.2241.
As our Editor, Mr. SP Tulsian put is rightly and said, “Avoid looking at market reaction. Britannia fell by 2% inspite of good numbers and rose by 5% next day.”