InvestorQ : How badly is the Hindustan Unilever business impacted and do you see the valuations of the company getting hurt?
Aashna Tripathi made post

How badly is the Hindustan Unilever business impacted and do you see the valuations of the company getting hurt?

Answer
image
Tisha Malhotra answered.
1 year ago
Follow

HUL had recently reported 7% fall in volumes for the March quarter while announcing its quarterly results. The operations of HUL have been affected negatively due to the lockdown. As of now, the company has resumed 70-80% of its operations but the company will be able to estimate the extent of demand slump only after normalcy is restored and economy activity starts in full earnest. The CEO of HUL has himself admitted that their assessment was that the trade pipelines would have come down significantly. The extent of demand impairment is still not clear. The CEO admitted that it was hard to estimate at this stage whether the demand has been deferred or shifted or lost completely. That would determine the future trajectory of the FMCG business. In fact, Nielsen has slashed 2020 growth outlook for India’s FMCG sector from 9-10% to 5-6%. For the March 2020 quarter, India’s FMCG sector grew by just 6.3% (including e-commerce) in value; down sharply from 13.8% growth a year ago. HUL expects demand patterns to change; especially an upswing in categories such as health, hygiene and nutrition.

3 Views