Hindustan Unilever hits over 3-month low; stock falls 12% in 2 months

 Shares of Hindustan Unilever (HUL) were under pressure, hitting an over three-month low of Rs 2,042, down 3 per cent on the BSE in the intra-day trade on Monday. The stock of the fast-moving consumer goods company (FMCG) was trading at its lowest level since May 29, 2020.

In the past two months, HUL has underperformed the market by falling 12 per cent after it reported a mixed set of numbers for the quarter ended June 30, 2020 (Q1). In comparison, the S&P BSE Sensex has risen 2 per cent during the period. The company paid a dividend of Rs 23.50, including a special dividend of Rs 9.50 per share since June.

While profit before tax (PBT) for the period fell 6 per cent year-on-year (YoY) to Rs 2,411 crore, the company's revenue increased 4.4 per cent YoY to Rs 10,560 crore, thanks to the merger of GSK Consumer nutrition brands with the companies. Excluding the GSK business, overall revenue declined 7 per cent in the quarter. Operating profit, however, fell 0.1 per cent to Rs 2,644 crore in Q1, while operating margins narrowed to 25 per cent from 26.2 per cent a year ago.

"Constraints continue due to restrictions in several parts of the country and the near-term demand outlook remains uncertain," the management had said while announcing Q1 results on July 21.

Analysts at Edelweiss Securities note that HUL’s stock has underperformed lately due to various factors such as a cut-back in out-of-home consumption (5 per cent of HUL’s portfolio, down 69 per cent YoY), the perception that HUL does not benefit from higher in-home consumption of food items, a sharper 45 per cent YoY fall in discretionary categories such as skin care, colour cosmetics & deodorants— with people confined indoors due to the lockdown, and pressure on gross margin (down 233bps YoY in Q1FY21) stemming from an adverse mix.

Localised lockdowns may affect near-term volumes, but the brokerage firm expects volumes and earnings to bounce back once the situation normalises. They expect premiumisation to sustain (albeit delayed) and hence expect better earnings growth.

RIL, HUL, Bajaj Finance, Nestle India from Nifty 50 index hit record highs

Shares of Reliance Industries (RIL), Hindustan Unilever (HUL), Bajaj Finance and Nestle India from the Nifty 50 index hit their respective all-time high on the National Stock Exchange (NSE) in intra-day deal on Friday.
Avenue Supermarts, which runs the DMart chain of stores, Adani Green Energy, Berger Paints, Blue Star, Indraprastha Gas, Manappuram Finance, SBI Life Insurance, Siemens and Whirlpool of India among total 16 stocks from the Nifty 500 index that also reached their record high in intra-day trade today.
RIL hit a new high of Rs 1,428, up 2 per cent, ahead of its July-September quarter (Q2FY20) results. The stock surpassed its previous high of Rs 1,418 touched on May 3, 2019. The oil-to-telecom behemoth today Friday hit another milestone as the market capitalisation of the company breached the coveted Rs 9 trillion-mark, a first by any Indian company. READ MORE ABOUT IT HERE
The Mukesh Ambani-led company is slated to release its September quarter results later in the day, where it is expected to report a strong quarter for the July-September period. Analysts expect refining to offset weakness in petrochemicals (petchem) and a lower tax rate benefit for the retail and telecom businesses.
HUL was trading higher for the eight straight day. The counter hit a new high of Rs 2,116 on Friday, gaining 5 per cent during the period. The fast moving consumer goods (FMCG) company reported better-than-expected Q2FY20 results.
HUL’s net profit grew 21 per cent year on year (YoY) at Rs 1,840 crore, while sales revenue rose 6 per cent YoY at Rs 9,708 crore relative to the corresponding quarter of the previous fiscal. EBITDA (earnings before interest, tax, depreciation and amortization) margin, too, expanded 293 bps YoY to 24.8 per cent in Q2FY20. Benign input cost, improved product-mix, cost saving initiatives, lower employee cost and higher operating leverage contributed to better operating performance despite higher advertising expenses. GET Q2 PERFORMANCE HERE

SBI Life Insurance, too, hit a new high of Rs 930. The stock has gained 12 per cent in four days, after the company reported a strong growth of 33.3 per cent YoY and 17.5 per cent YoY in gross written premium (GWP) and new business annualized premium equivalent (APE), respectively in Q2FY20. Renewals registered 33.2 per cent growth YoY.
Manappuram Finance that surged 8 per cent to Rs 155 on Friday extended its previous day’s 6 per cent gain on the NSE. The non-banking housing finance company surpassed its previous high of Rs 145 recorded on September 27, 2019. Analysts expect its assets under management (AUM) growth to gain traction going ahead given the sharp rise in gold prices. The company is in comfortable liquidity position of around 80 per cent assets mature within next three months, reports suggest.
COMPANY LATEST ALL TIME HIGH PREV HIGH PREV DATE
ADANI GREEN 91.65 93.00 92.90 17-Oct-19
ATUL 4241.15 4263.30 4220.00 17-Oct-19
AVENUE SUPER. 1927.00 1964.90 1945.05 23-Sep-19
BAJAJ FIN. 4140.00 4199.00 4117.20 17-Oct-19
BERGER PAINTS 497.80 498.95 490.95 17-Oct-19
BLUE STAR 834.00 848.85 844.30 25-Apr-18
FINE ORGANIC 1935.00 1983.30 1930.05 15-Oct-19
HIND. UNILEVER 2110.60 2116.00 2108.00 17-Oct-19
INDRAPRASTHA GAS 379.00 381.50 380.40 14-Oct-19
MANAPPURAM FIN. 153.50 154.90 145.00 27-Sep-19
NESTLE INDIA 14740.30 14743.70 14630.35 17-Oct-19
RELAXO FOOTWEAR 526.00 526.00 516.40 23-Sep-19
RELIANCE INDS. 1420.05 1427.90 1417.50 03-May-19
SBI LIFE INSURAN 920.00 929.50 928.50 17-Oct-19
SIEMENS 1647.10 1656.00 1632.40 17-Oct-19
WHIRLPOOL INDIA 2169.30 2203.95 2180.00 17-Oct-19

HUL Q2 net up 21% YoY to Rs 1,848 cr; to give Rs 11/sh as interim dividend

Hindustan Unilever (HUL) on Monday posted net profit of Rs 1,848 crore, up 21 per cent year-on-year (YoY) for the second quarter of the financial year 2019-20 (FY20). The company had posted profit of Rs 1,525 crore in the year-ago period.
On a consolidated basis, the company posted net profit of Rs 1,814 crore, up 22.7 per cent YoY. CLICK HERE FOR THE CONSOLIDATED NUMBERS
"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.

HUL Q1 consolidated net profit up 14.5% at Rs 1,792 crore

Hindustan Unilever (HUL) on Tuesday reported a 14.5 per cent rise in its consolidated net profit at Rs 1,792 crore for the quarter ended June 30, 2019. It had logged a profit of Rs 1,565 crore in the year-ago period. On standalone basis, net profit came in at Rs 1,755 crore, up 14 per cent YoY.
Total income for the quarter under review came in at Rs 10,509 crore, up 1.89 per cent year-on-year (YoY). Revenue from operations stood at Rs 10,197 crore, up 1.78 per cent YoY against Rs 10,018 crore.
EBIDTA (earnings before interest, depreciation, tax and amortisation) for the quarter grew 18 per cent to Rs 2,647 crore. Total sales and consumer business grew by 7 per cent during the quarter, HUL said in its press release.
Basic earnings per share (EPS) of the company came in at Rs 8.28 against Rs 7.27 in the corresponding quarter of the previous fiscal.

CLICK HERE FOR THE DETAILED BREAKUP OF THE NUMBERS
Analysts at ICICI Securities had projected sales/revenue to grow 9.7 per cent YoY at Rs 10,410 crore. Sequentially, the numbers were estimated to rise 4.7 per cent. EBITDA, they wrote in a results preview note, was likely to increase 6.1 per cent YoY and 2.9 per cent QoQ to Rs 2,388.8 crore while PAT was pegged at Rs 1,642.2 crore, up 7.4 YoY (up 6.8 per cent QoQ).
"Against the backdrop of moderate market growth, HUL has delivered a resilient performance driven by expansion of our consumer franchise, improvement in portfolio mix and sustained growth in margins. Our focus on strengthening the core, leading market development & premiumisation, driving channel transformation and building brands with purpose, continues to serve us well," said Sanjiv Mehta, HUL's chairman and managing director.
Segment wise, Home Care vertical revenue grew 10 per cent YoY to Rs 3,464 crore while Beauty and Personal Care segment saw a growth of 4.18 per cent at Rs 4,626 crore.

VDO.AI

Big FMCG firms move to protect turf as competition from start-ups hots up

Last week, Hindustan Unilever (HUL) said it was launching a liquid detergent, responding to retailer Future Group rolling out a similar product only a few weeks earlier in its stores. This is one of the most recent examples — not the first, and definitely not the last — of a fast-moving consumer goods (FMCG) company fighting competition from unconventional rivals, whether online or offline.
In recent months, FMCG firms such as Dabur, Marico, ITC and Bajaj Consumer are all padding up, launching digital-only brands in categories such as personal care, male grooming and premium hair nourishment, as e-tailers and start-ups increasingly get aggressive.

In the past one year, companies such as Emami, Wipro Consumer, and Marico invested in online grooming companies such as The Man Company, Ustraa and Beardo to tap into the growing segment. Some others such as Proctor & Gamble have set up an India-focused fund to invest in start-ups that can collaborate with it.
During his address to shareholders last month, HUL Chairman and Managing Director Sanjiv Mehta said the company would take all necessary steps to be future-ready at a time when the digital economy was increasingly becoming central to consumption.
“Over the next decade, the country will have a large cohort of ‘Generation Z’ consumers who would have grown up in an India with ubiquitous internet, smartphones and digital media. As they start earning and consuming, they will actively use technology-enabled platforms, impacting purchase behaviour. With the world changing around us, HUL is adapting to be future-fit,” he said.
Bajaj Consumer, for instance, is working with Reliance Retail to target consumers of premium ayurvedic hair oils that frequent its stores.

“As modern trade grows as a channel, FMCGs will have to look at products suitable for that segment,” said Sumit Malhotra, managing director, Bajaj Consumer. “The same applies for the online channel too. Consumer engagement across platforms is growing, forcing companies to relook at strategies.”
A recent report by Boston Consulting Group on India’s retail landscape said modern trade would grow twice as fast as traditional trade over the next few years, contributing around 15-17 per cent of FMCG sales versus 9-10 per cent now.
E-commerce, on the other hand, would contribute to about 5-6 per cent of FMCG sales from about 2-3 per cent now, said experts tracking the market. Niche categories across home, personal care and foods will also see higher penetration.
The influence of digital platforms is already higher than traditional trade, with nearly 40 per cent of FMCG consumption affected in some way or the other by digital platforms, said Abneesh Roy, senior vice-president, research (institutional equities), Edelweiss.
Retailers are also launching private labels aggressively to take advantage of the boom.
On Friday, Reliance Retail said it had launched its own food brands under the brand Snac Tac and a juice brand called Yeah at its stores during the June quarter. It would ramp up efforts in the coming months, including a push to omnichanel retail.

HUL sets up end-to-end digital transformation plan for next phase of growth

The country's largest consumer goods company, Hindustan Unilever (HUL), on Saturday said it had put in place an end-to-end digital transformation plan as it sought to get future-ready.
Addressing shareholders at its 86th Annual General Meeting (AGM), Sanjiv Mehta, chairman and managing director of HUL, said a new digital council had been set up at the company, and over 80 experiments were underway to help in the transformation.

"By 2030, India will have a large cohort of ‘Generation Z’ consumers with ubiquitous internet, smartphones, and digital media. As they start earning, they will actively use technology-enabled consumption models and have a big influence on the consumption behaviour of their households,” said Mehta.
The 58-year-old executive —appointed chairman last year after Harish Manwani retired — said HUL had devised a five-pronged strategy, which includes driving purpose into brands, enhancing societal impact, innovating for the future, nurturing talent, and leveraging data and technology (including artificial intelligence) across the value chain. “Our people data centre picks up real-time consumer signals and identifies business opportunities. We are using shopper data to drive precision marketing, and using machine learning to monitor demand in the real time,” he said, describing the digital transformation process.
The firm is also ramping up technology on the factory floor by reducing service lead time through an integrated sales and operation planning programme, thus creating a customer-focused network as well as a faster logistics and distribution footprint, said Mehta.
"Our Internet of Things (IoT)-powered digital factories are helping us leverage installed capacities. Automated warehouse robotics and guided vehicles are helping with stock accuracy, reducing truck loading time, and raising the level of customer service,” he said.
Mehta added that HUL was re-skilling its workforce, developing niche digital skills in leaders, and shifting to a culture of “always-on” learning, which focused on mentoring, peer-to-peer learning and e-learning.

HUL Q3 net profit at Rs 1,444 crore vs Rs 1,326 crore, up 8.9% YoY

FMCG major Hindustan Unilever (HUL) Thursday reported a 9 per cent increase in its net profit to Rs 1,444 crore for the quarter ended December 2018 on account of strong volume growth.
The company had posted a net profit of Rs 1,326 crore in the October-December quarter of the previous fiscal.

Sales during the quarter under review stood at Rs 9,357 crore, up 12.42 per cent, as against Rs 8,323 crore in the corresponding period a year ago, HUL said in a regulatory filing.
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"Domestic consumer growth was 13 per cent with underlying volume growth at 10 per cent. EBITDA margin was up 170 basis points and profit after tax (before exceptional items) grew by 17 per cent," HUL said in a statement.
Commenting on the results, HUL chairman and managing director Sanjiv Mehta said: "We have delivered another strong performance in the quarter, with double digit volume growth and improvement in margins." He further said: "Our focus on strengthening the core and leading market development by tapping into emerging trends has been yielding results across categories." HUL's total expenses for the said period came in at Rs 7,652 crore as against Rs 7,036 crore, up 8.75 per cent.
Shares of HUL settled at Rs 1,750.10 apiece on the BSE, down 1.12 per cent from their previous close.

Hindustan Unilever plans legal battle against anti-profiteering authority

The fight between the National Anti-profiteering Authority (NAA) and the largest fast-moving consumer goods firm is set to get uglier. After one and a half years of the goods and services tax (GST) coming into effect, Hindustan Unilever (HUL) is planning to take the NAA to court after the authority sent it a fresh order seeking Rs 2.23 billion.
This could be the first instance when a consumer goods company would move court against the NAA.

In a filing to the Securities and Exchange Board of India (Sebi) on Wednesday, the FMCG company said it would “consider legal options available to it, given there is divergence on some basic issues” in determining the quantum of benefits to be passed on to consumers post-GST.
The Mumbai-headquartered firm also said the NAA’s latest order made “a narrow interpretation of the law and did not take into account well-established industry practice backed by law”.
Further, alleging the NAA order arbitrary, it said “no methodology has been determined by the NAA as required under law to determine if benefit has been passed or not”.
The backlash from HUL comes after a tug of war between the two for quite some time. The NAA has sent several orders to the makers of Dove soaps in the past one year, alleging it of bagging benefits received from reduced tax rates.
ALSO READ: Year of reckoning for India Inc: HUL-GSK's Rs 317-bn deal a market booster
The latest order came after the Director General of Anti-Profiteering (DGAP) filed a report to the NAA, accusing HUL of not passing on Rs 4.56-billion in benefits during the assessment period of November 15, 2017, to February 28, 2018. Moreover, it was found that a sum of Rs 789.7 million, which the HUL claimed as input tax credit (TRAN-2), was not passed on. The report, however, noted that HUL has passed on benefits worth Rs 687.7 million.
The latest order pegged the total amount of tax benefit that HUL had not passed on at Rs 3.83 billion, after factoring in certain deductions.
As the firm had already deposited Rs 1.6 billion to the consumer welfare fund voluntarily, the NAA asked is to deposit the remaining Rs 2.23 billion in central and state consumer welfare funds.
Alleging HUL of deliberately bagging the profits from reduced taxation on its goods, the NAA order had said: “It is clear that the respondent (HUL) has resorted to profiteering being very well aware of the law and the rules which warranted him to pass on the benefit of GST rate reduction. It has further acted in conscious disregard of the obligation which was cast upon him to pass on the benefit of GST rate reductions.”
HUL said that in the absence of set guidelines on profiteering, it went by the spirit of the law and passed on the entire benefit received under GST to consumers — either through reduction in prices or through increase in grammage. “HUL kept the government informed of the approach and the manner that it had adopted in passing on the GST benefits to consumers,” the company said on Wednesday.
The confrontation between the FMCG giant and the NAA began after the Central government reduced tax rates on over 175 items like toothpaste, shampoo, shaving cream and washing powder to 18 per cent from 28 per cent — effective from 15 November, 2017. According to anti-profiteering rules, manufacturers have to pass on the added benefits from reduced taxation to its customers, failing which it would have to deposit the amount to the government’s consumer welfare funds.
After the reduction, the authorities had also asked the manufacturers to affix additional labels or print the reduced maximum retail price on every pack of products. They were also instructed to publish the same on newspapers, informing consumers.

NAA slaps Rs 3.83-bn penalty on HUL for not reducing MRPs of products

The National Anti-Profiteering Authority (NAA) has slapped a penalty of Rs 3.83 billion on Hindustan Unilever Ltd (HUL) for not reducing maximum retail prices of its products after the goods and services tax rate cuts came into effect on November 15, 2017.
The GST rate was cut on a number of products from 28 per cent to 18 per cent that day.

Of the Rs 3.83 billion, half the sum — Rs 1.91 billion — is to be deposited in the central Consumer Welfare Fund (CWF) and the other half in the similar funds of 35 states and Union territories.
The company has deposited Rs 1.60 billion in the central CWF, according to calculations made by it. Now HUL is required to deposit Rs 314 million in this fund.
As Rs 362 million (in the Rs 1.91 billion) has been apportioned by the Directorate General of Anti-Profiteering (DGAP) to CWFs, HUL was ordered to deposit the balance to the CWFs of states and UTs.
ALSO READ: GST authority says HUL didn't pass on Rs 3.83-bn rate cut benefit to buyers
An HUL spokesman said the company was reviewing the order and would explore all “possible” options.
He said, “In the absence of set rules and guidelines on profiteering, we have gone by the spirit of the law, and we passed on the entire benefit received under the GST to consumers — either through reduction in prices or increase in grammage.”
The authority had calculated the amount of profiteering at Rs 5.35 billion and arrived at Rs 3.83 billion after some deductions. Of various deductions HUL wanted, the authority allowed Rs 687 million for increase in grammage in the size of products.
The NAA did this for the first time.
Tax experts said the order was surprising in the absence of any prescribed method in the GST law to calculate the undue profit earned.
“The problem that India Inc faces is how to comply with anti-profiteering rules. That’s because no rule exists,” a tax consultant said.
“Though contrary to an earlier order by the authority, where passing on benefits by increase in quantity was disallowed, the deduction allowed in this order appears to be the correct interpretation,” said Harpreet Singh, partner, KPMG.
NAA slaps Rs 3.83-bn penalty on HUL for not reducing MRPs of products Abhishek Jain, partner, EY, said the order had allowed adjustment where the benefit of the GST was passed through increased grammage, which was positive for the industry.
The company spokesman referred to Rs 1.60 billion deposited by the company in the CWF, as cited above.
"We kept the government informed of the approach and the method that we had adopted in passing on GST benefits to consumers. The DGAP had submitted a report, which we had responded to comprehensively," he said.
M S Mani, partner, Deloitte India, said in the absence of a framework or methodology to determine how GST rate reductions or increase in input tax credits should be passed on, any decision that did not consider the overall cost, weight, size, and package aspects might be challenged.
The DGAP did the investigation for the period between November 15, 2017, and February 28, 2018.
The NAA directed the DGAP to conduct further investigation to ascertain whether the respondent had passed on the benefits of tax reductions in respect of all the products being sold and submit a report quantifying the amount of profiteering.

Seven of top 10 companies lose Rs 756 bn in m-cap, HUL takes steepest hit

Seven of the 10 most valued Indian companies suffered an erosion of Rs 756.84 billion from their market valuation last week, with FMCG major HUL taking the steepest hit.
In a weak broader market where the Sensex fell by 255.25 points or 0.66 per cent last week, the top seven blue chip companies, including State Bank of India (SBI), Maruti Suzuki India and ITC witnessed a decline in their market valuation.

In the top-10 list, only Reliance Industries Ltd (RIL), TCS and Infosys finished with gains.
The market capitalisation (m-cap) of Hindustan Unilever Ltd (HUL) tumbled Rs 294.49 billion to Rs 3.54 trillion.
SBI's valuation plunged Rs 151.71 billion to Rs 2.60 trillion and that of Maruti Suzuki India dived Rs 110.16 billion to Rs 2.63 trillion.
ALSO READ: TCS regains most valued firm tag again, beats RIL on market valuation
The m-cap of ITC tanked Rs 107.02 billion to Rs 3.79 trillion and that of Kotak Mahindra Bank dropped Rs 71.30 billion to Rs 2.37 trillion
Also, HDFC Bank's valuation went down by Rs 11.94 billion to Rs 5.58 trillion and that of HDFC fell by Rs 10.18 billion to Rs 3.25 trillion.
ALSO READ: RIL surpasses TCS to regain most valued firm status by market valuation
On the other hand, the market cap of RIL soared Rs 227.84 billion to Rs 8.09 trillion.
Infosys added Rs 57.34 billion to its m-cap to reach Rs 3.20 trillion and TCS gained Rs 5.74 billion to Rs 7.96 trillion.
In the ranking of top-10 firms, RIL stood at number one position followed by Tata Consultancy Services (TCS), HDFC Bank, ITC, HUL, HDFC, Infosys, Maruti, SBI and Kotak Mahindra Bank.

Harish Manwani, HUL's longest serving chairman, takes final bow at AGM

A 42-year-long career drew to an end on Friday as Harish Manwani, 65, chaired the annual general meeting of Hindustan Unilever (HUL), the country's largest consumer goods company, for the last time.
Addressing shareholders at the AGM, which was the company's 85th, Manwani, who was HUL's longest-serving chairman (appointed in 2005 in a non-executive capacity), said these were unpredictable times and that the nearly Rs 350-billion firm would have to respond with a new paradigm that was 'great to good'.

"Going from great to good requires businesses to embrace a larger purpose that goes beyond generating short-term financial results. A corporate purpose that is relatable, a purpose that goes beyond physical products and services, and makes a real difference to society," he said, acknowledging shareholder gratitude for his tenure at the company.
Manwani also reiterated the importance of digital and technology, saying they were key for the success of the company in the future. "We are leading the digital transformation with significant investment in automation, robotics and artificial intelligence across the value chain. Through advanced data analytics, we are reinventing the way we market our brands through digital media and our go-to-market models," Manwani said.
HUL, he said, was using GPS tagging technology to identify and prioritise markets for distribution among other its digital initiatives. And was also using technology to increase its presence in e-commerce, a small but growing channel.
Manwani also said that the company was working on a food strategy that was centred on building a platform of brands that were innovative and met consumer needs.
The statement acquires significance since earlier this month, HUL said it was bringing its food and refreshment verticals together, effective July 1, in keeping with global portfolio alignments.
The company had also said that the move would allow it to harness synergies and scale up the business as the combined vertical was a strategic priority for it.
Manwani also said that he saw no problem with HUL paying royalty to parent Unilever, since the subsidiary was paying for what it received.
"I am not at all concerned with what we pay them (Unilever) because a cost-benefit analysis of the royalty we give is done," he said while addressing a shareholder query on the subject.
HUL, has in the last five years, increased royalty to Unilever in a phased manner from 1.4 per cent to 3.15 per cent as the local portfolio has seen introduction of global brands from Unilever.
HUL also declared a total dividend of Rs 20 per share for the 2017-18 financial year though Manwani said there was no bonus issue in the offing.
"What we look at is total shareholder value versus a bonus issue. And the former includes dividend payout and capital appreciation, parameters on which we have done well," he said.
Manwani also said that the introduction of Goods & Services Tax in July 2017 had led to lower output tax on over half its portfolio and that the new tax regime was good for overall category and market growth.