"We expect HUL's revenue to grow 7 per cent year-on-year (YOY) to Rs 9,880 crore, with underlying domestic volume growth of 6 per cent in 2QFY20. Base quarter volumes were up 10 per cent YOY. Gross margins are likely to be up 140 basis points (bps) YOY to 53.4 per cent. Operating margin is seen expanding 150 bps YOY to 23.4 per cent in the quarter, leading to EBITDA growth of 14.4 per cent YOY. Adjusted PAT (profit after tax) is likely to grow 6.1 per cent YOY to Rs 1,610 crore due to very high other income base in 2QFY19," analysts at Motilal Oswal had written in a result preview note.
Revenue for the quarter came in at Rs 9,852 crore, up 6.7 per cent YoY while EBITDA came in at Rs 2,443 crore, up 21 per cent YoY. EBITDA margin jumped 290 bps YoY to 24.8 per cent YoY from 21.9 per cent in the corresponding quarter of the previous fiscal. The company's Domestic consumer growth stood at 7 per cent while volume growth for the period was 5 per cent.
The company also declared an interim dividend of Rs 11 per share for the year ending March 21, 2020.
"Amidst a challenging market environment, HUL has delivered another quarter of resilient performance and sustained margin improvement. Our focus on consumer value, excellence in execution and market development continues to serve us well," Sanjiv Mehta, Chairman and Managing Director commented.
"The near-term outlook for demand, especially in rural India, remains challenging. We welcome the various measures announced by the Government and the Reserve Bank of India to spur investment and improve liquidity and are confident that the government will take all necessary steps for higher income transference to rural India," the company said in its earnings release.
"HUL remains well positioned to unlock the structural FMCG India opportunity while navigating the short-term challenges. We continue to progress our ‘purpose-led and future-fit’ agenda which is underpinned by our sustainability initiatives and ‘Re-imagining HUL’ driven by leveraging data and technology in all aspects of our operations," the statement added.
That apart, HUL also announced the appointment of Willem Uijen as Executive Director, Supply Chain and a member of the HUL Board with effect from January 1, 2020.