Hindustan Unilever (BOM:500696)

The Economic Times  Jul 28  Comment 
Hindustan Unilever has proved the Street wrong and delivered an improved performance for the quarter through June. After dropping to a low of 4%.
The Economic Times  Jul 28  Comment 
But big consumer goods manufacturers such as Hindustan Unilever, Godrej Consumer and Dabur have been able to buck this trend, reporting a 6-13% jump in first quarter domestic sales on Monday.
The Economic Times  Jul 28  Comment 
After dropping to a low of 4 per cent in the March quarter, HUL's volume growth inched higher at 5 per cent.
The Hindu Business Line  Jul 28  Comment 
Consumer goods giant Hindustan Unilever Ltd's net profit grew marginally by 4 per cent at Rs 1,057 crore in the quarter ended June 30, 2014. The net profit included higher exceptional in...
The Hindu Business Line  Jul 28  Comment 
The Hindu Business Line  Jul 28  Comment 
Hindustan Unilever shot into the leader ahead of the close on the BSE on Monday. At 2.40 pm the stock held gains of 3.49 per cent at ₹685.10 as against ₹662. The FMCG major today reported that its...
The Hindu Business Line  Jul 25  Comment 
FMCG major Hindustan Unilever jumped into the lead on the BSE on Friday morning. At 11.04 am it was the top gainer on the bourse, quoting at ₹657.25, up 2.33 per cent on its previous close of ₹642...
The Hindu Business Line  Jul 22  Comment 
The last time rainfall turned scanty, in 2009, fast-moving consumer goods companies did keep up sales growth. Rural demand didn’t buckle completely; Hindustan Unilever, Dabur, and Godrej Co...
Reuters  Jul 14  Comment 
The BSE Sensex remained under pressure on Monday, falling for a fifth consecutive session as foreign investors turned sellers, hitting blue-chips such as ICICI Bank and Hindustan Unilever.
The Hindu Business Line  Jul 2  Comment 
Motilal OswalHUL (Sell)CMP: ₹630.45Target: ₹600We attended Hindustan Unilever’s Analyst Day where management stressed on building a future-ready company in a VUC...
The Economic Times  Jun 30  Comment 
Hindustan Unilever today unveiled a five-pronged strategy to meet the rising demands of the tech-savvy market and keep itself future-ready.


Hindustan Unilever Ltd. (Bombay Stock Exchange: 500696) makes fast-moving consumer goods (FMCG) such as detergents, toiletries, and food staples. The company has a distribution channel of 6.3 million outlets and 30 major Indian brands. HUL recorded 20.02 year over year (yoy) growth in revenue at Rs 16660.38 crores during the year ended Dec'08. Its Soaps and Detergents business was its largest contributor to revenues with 46% of total revenues where as Personal Care products contributed the most (46%) towards EBIT (Earnings before Income Tax).

Increase in per capita income in urban, as well as rural areas, of India has a positive effect on demand of consumer goods along with a shift in demand towards high end lifestyle products. Long a provider of low cost consumer goods, HUL has recently launched products in its high end segments.

Company Overview

HUL, the largest FMCG Company in India by revenues was formed by merging three subsidiaries of Unilever in 1956. At present, Unilever Plc holds a 51.6% stake in the company. HUL’s portfolio of products covers a wide spectrum including soaps, detergents, skin creams, shampoos, toothpastes, tea, coffee and branded flour.[1] HUL's brands, spread across 20 distinct consumer categories. It owns 35 major Indian brands. HUL has consistently had the most number of brands in the Top 10 list for the most trusted brands in India from 2003 to 2009. Surf Excel, Pepsodent and Ponds in Home and Personal Care segment and Lipton, Kissan and Brooke Bond in Foods and Beverages Segment are some of its top brands. It launched Ponds Age Miracle,Vaseline range of products in skin care category and Axe-Dark Temptation in personal care segment as part of their expansion into higher end products.

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Trends and Forces

Increasing raw material prices drives HUL to raise its prices

Raw materials constitute a big chunk (around 60%) of input cost for FMCG sector companies. For HUL- Palm Oil and Chemicals contribute 59% of total raw material cost. Due to inflated input cost in Soap and Detergents division EBITDA(earnings before income tax and depriciation) margins have suffered.

The first steep increase in the prices of key raw materials such as palm oil, LAB - Linear Alkyl Benzene, caustic soda, soda ash, raw tea, coffee and crude oil derivatives has led the company to implement price hikes in competitive segments like toothpaste, soaps, detergents and shampoo.

But recently softening Inventories - Raw Materials prices in the last 2-3 months have provided respite to FMCG sector companies. Raw material and packaging materials have fallen sharply from their highs recorded in Sep'08. The benefit of fall in raw material prices will be accured later when high cost inventory will be replaced by a cheaper inventory.

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Per Capita consumption of personal care products in India is one of the lowest among developing economies of the world.

India has one of the lowest levels in per capita consumption of consumer goods among developing economies of the world. It has per capita consumption levels of 1.4,0.3,0.2 and 0.3 US$ in detergents, shampoo, ice-creams and skin care segments respectively which are lower than that of China, Brazil and Indonesia. Consumption levels in the U.S., a developed country, are 16.6, 6.7, 49.4 and 36.6 in categories mentioned before. Low consumption coupled with increase in per capita income poses as a growth opportunity for consumer products companies.

Highly Competitive FMCG Sector limits profit margins of HUL.

In a volume driven and competitively intense environment with competition also from local players FMCG players are aggressively promoting their brands to gain product awareness, customer base, and their shares of the customers’ wallets. To facilitate launch new products and relaunch of existing products companies are increasing their research and development expenditure. These factors eat up the profitability margins of the companies. Pricing scenario in current time is in favor of companies but in past due to pricing war with P&G in Soaps and Detergents.


The Indian FMCG sector is the fourth largest sector in the economy with a total market size of $18 billion. As the name suggests FMCG products are frequently used and bought by the customers so there are large number of players supplying same products. HUL is the only company in Indian consumer goods market that has products in more segments than any other company of the same sector.HUL is the largest FMCG company in terms of revenues.

Procter and Gamble (P&G) India : HUL faces a fierce competition from P&G India in its key segments i.e. Detergents and Personal Care. It operates in India thorugh three subsidiaries: Procter and Gamble Home Products (100% subsidiary of the company), Procter and Gamble Hygiene and Health care Ltd. (PGHH) and Gillette India Ltd. It has in its portfolio some of P&G's Billion dollar brands such as Vicks & Whisper in health care and Ariel and Tide in detergents segments.[2]

Godrej Consumer Products Ltd. (GCPL): It has two segments: Soap (64% of revenues) and Personal Care.GCPL is second largest soap player in India after HUL with a market share of 9.2%. Personal Care includes hair care products, shaving cream and other toiletries.

Dabur India Limited - Dabur India Limited is an India-based fast moving consumer goods company which deals in healthcare, personal care and food products.

Colgate-Palmolive (India) Limited : It manufactures a range of products marketed under the Colgate which includes oral care products and Palmolive (skin care and hair care products) brand names.

Marico Limited:Marico has a portfolio on high margin "Beauty and Wellness" platform which includes hair oils, soaps, edible oils, skin care etc.


  1. Company Website
  2. P&G India website
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