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HINDUSTAN LEVER

Restating its corresponding quarter numbers has enabled FMCG major Hindustan Lever enhance its first quarter performance with total income moving up by 3 per cent over the previous corresponding quarter to Rs 2,508.77 crore (Rs 2,434.39 crore) against which the total expenditure was up by 2 per cent. Net profit grew 8 per cent to Rs 382.92 crore (Rs 353.82 crore).

Net sales at Rs 2,367.50 crore (Rs 2,338.46 crore) went up just about 1 per cent over the previous corresponding period. The home and personal care products division grew 11 per cent, led by a 41 per cent growth in hair, 27 per cent in skin, 16 per cent in oral and 5 per cent in laundry. The foods business continues to be a drag with sales from it declining 10 per cent over the year-ago period.

Exports were up 5 per cent. At Rs 1,976.93 crore, (Rs 1,941.07 crore) operational cost was up 2 per cent over the previous corresponding quarter. Although advertisement and sales promotion expenses were down 7 per cent and 2 per cent respectively, a 12 per cent rise in staff costs and a 4 per cent increase in raw material consumption along with a 6 per cent rise in the cost of finished goods purchased drove up operational cost.

HLLís operating profit fell for the first time ever in recent memory. At Rs 390.57 crore (Rs 397.39 crore) it was down 2 per cent over the previous corresponding quarter. OPM at 16 per cent was a percentage point below its year-ago period. Segment wise soaps and detergents continues to be its strength with a 51 per cent contribution to the PBIT followed by personal care products which bring in 35 per cent.

The foods, beverages and ice creams business continues to drag HLLís profitability contributing nothing substantial to its profits. Other income went up 47 per cent over the year-ago period to Rs 141.27 crore (Rs 95.93 crore). Interest cost was negligible. Depreciation fell 20 per cent over the previous corresponding quarter to Rs 30.76 crore (Rs 38.42 crore).

Tax provision was up 19 per cent over the previous corresponding quarter to Rs 116.33 crore (Rs 97.51 crore) and net profit moved up 8 per cent over the year-ago period to Rs 382.92 crore (Rs 353.82 crore).

The stock has been struggling for a long time now and currently trading at a five-year low level of Rs 142 discounting its March quarter annualised EPS of Rs 6.96 by 21 times. It is still costly.

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