Introduction: The share price of this large-cap FMCG firm surged around 3 percent to an intraday high of Rs 2,693 per share on Tuesday after the company announced the sale of its water purification business for Rs 601 crores to a US-based firm.
Share price movement: With a market capitalization of Rs 6,30,160 crores, the shares of Hindustan Unilever Limited surged around 2 percent at 11:45 am, trading at Rs 2,680 apiece on Tuesday’s market hours. The shares of this company generated a negative return of 1 percent over the past year and a positive return of 4 percent over the past 6 months.
What happened: According to Hindustan Unilever Limited’s stock exchange filings, its board of directors has approved the sale and divestment of its Water purification business ‘Pureit’ for an enterprise value of Rs 601 crores to AO Smith India Water Products Private Limited, a subsidiary of A.O smith corporation USA which is a leading global water technology company.
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The exchange filings also mentions that the turnover of Pureit as of FY2023-24 stood at Rs 293 crores and this transaction is expected to be completed within a period of 3 months.
Why it matters: This sale was done considering Hindustan Unilever Limiteds strategic intent to focus on its core categories, as per the exchange filings.
Financials: Reviewing the financials of Hindustan Unilever Limited on a year-on-year basis, the revenues rose by 2 percent from Rs 60,580 crores in FY23 to Rs 61,896 crores in FY24. In the same time frame, the net profits increased from Rs 10,143 crores to Rs 10,282 crores, demonstrating a 1 percent increase.
Ratios: In terms of return ratios for the year 2024, it has reported a return on equity (ROE) of 20.06 percent and a return on capital employed (ROCE) of 96.3 percent. The debt-to-equity ratio of the firm stood at nil for the same period.
EBITDA Margin and cash from operations: As of FY2023-24 the EBITDA margin of the firm stood at 23.8 percent and the cash from operations was at Rs 15,179 crores.
Segmental Revenue: For FY2023-24, the segmental revenue was Rs 21,900 crores of revenues from home care, Rs 22,165 crores from beauty and personal care, Rs 15,292 crores from food and refreshment, and Rs 1,112 crores from other segments.
Product Portfolio: Hindustan Unilever Limited’s diverse product portfolio includes beauty and personal care, food and refreshments, and home care. Beauty and personal care brands include Dove, Closeup, Axe, etc. Home care brands include Vim, Comfort, Surf Excel, etc. Food and refreshments brands include Kissan, Horlicks, Knorr, etc
Shareholding Pattern: As of March 2024, Hindustan Unilever Limited’s shareholding pattern stood at 61.90 percent for promoters, 12.15 percent for the public, 12.67 percent for foreign institutional investors, and 13.27 percent for domestic institutional investors.
About the Company: Incorporated in the year 1933 and based in Mumbai, Hindustan Unilever is in the FMCG business comprising primarily of Home Care, Beauty & Personal Care, and Foods & Refreshment segments. The company has over 50 brands in 16 verticals and also has operations in nearly 190 countries. Hindustan Unilever Limited is a market leader in the FMCG sector in India with over 75 percent of HUL’s business has gained market share.
Written By Zahal
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