About Hindustan Unilever Ltd
Hindustan Unilever Ltd (HUL) is India’s largest fast-moving consumer goods Company with a heritage of over 80 years.
More than nine out of ten Indian households use one or more of Hindustan Unilever brands
The company present mainly in three category
- Home Care
- Beauty & Personal Care
- Foods and Refreshment
The company has more than 44 brands across 14 distinct categories including Fabric Solutions, Home and Hygiene, Life Essentials, Skin Cleansing, Skin Care, Hair Care, Colour Cosmetics, Oral Care, Deodorants, Tea, Coffee, Ice Cream & Frozen Desserts, Foods, Health Food Drinks (HFD), the Company is part of the daily life of millions of consumers.
Leading Brands of Hindustan Unilever
The company has many leading brands such as Surf Excel, Rin, Wheel, Sunlight, Vim, Pureit, Lux, Lifebuoy, Dove, Fair & Lovely, Pond’s, Vaseline, Clinic Plus, Sunsilk, Indulekha, Lakmé, Pepsodent, Closeup, Axe, Brooke Bond, Lipton, BRU, Kwality Wall’s, Knorr and Kissan.
- Five of Hindustan Unilever Products generate an annual turnover of over Rs 2,000 crore each.
- Seven of Hindustan Unilever Products generate an annual turnover of over Rs 1,000 crore each.
- Eight of Hindustan Unilever’s Products generate an annual turnover of Rs.500 crore each.
Hindustan Unilever Ltd History
In 1931, Unilever set up its first Indian subsidiary, Hindustan Vanaspati Manufacturing Company, followed by Lever Brothers India Limited (1933) and United Traders Limited (1935). These three companies merged to form HUL in November 1956.
The liberalization of the Indian economy started in 1991, clearly marked an inflection in HUL’s and the Group’s growth curve. Removal of the regulatory framework allowed the company to explore every single product and opportunity segment, without any constraints on production capacity.
1993 : Tata Oil Mills Company (TOMCO) merged with HUL
1996 : HUL and yet another Tata company, Lakme Limited, formed a 50:50 joint venture, Lakme Unilever Limited, to market Lakme’s market-leading cosmetics and other appropriate products of both the companies.
1998 : In 1998, group company Pond’s India Ltd was merged with HUL.
2002 : HUL made its foray into Ayurvedic health & beauty centre category with the Ayush product range and Ayush Therapy Centres
2003 : HUL acquired the Cooked Shrimp and Pasteurised Crabmeat business of the Amalgam Group of Companies, a leader in value added Marine Products exports.
2008: The company acquired the Lakme brand, its factories, and Lakme Ltd’s 50% stake in Lakme Lever Ltd in 2008.
On 17th October 2008, HUL completed 75 years of corporate existence in India
2016: In April 2016, HUL acquired the Kerala-based hair oil brand, Indulekha, for Rs 330 crore.
HUL completed 80 years of corporate existence in India on October 17th, 2013.
1st April 2020: The merger of the business of GlaxoSmithKline Consumer Healthcare Limited (GSK CH) in HUL
Hindustan Unilever Ltd Promotors
| Sr. No. | Name | % of total Shares of the Company |
| 1 | Unilever PLC | 51.48 |
| 2 | Brooke Bond Group Limited | 4.93 |
| 3 | Unilever Overseas Holdings AG | 3.18 |
| 4 | Unilever UK & CN Holdings Limited | 2.78 |
| 5 | Brooke Bond South India Estates Limited 5 | 2.44 |
| 6 | Brooke Bond Assam Estates Limited | 1.52 |
| 7 | Unilever Overseas Holdings B. V | 0.87 |
| Total | 67.18% |
Hindustan Unilever CEO & MD
Sanjiv Mehta is the Chairman and Managing Director of HUL since 30th June 2018.
He has been leading Unilever’s business in India and South Asia since October 2013 as CEO and Managing Director, HUL and Executive Vice President, Unilever, South Asia. Sanjiv was appointed as President, Unilever, South Asia, and member of the Unilever Leadership Executive, effective May 2019.
He has been with Unilever for 26 years and during the last 17 years has led businesses in different parts of the world. He has been the Chairman and Managing Director of Unilever Bangladesh Limited (2002-06), Chairman and CEO of Unilever Philippines Inc. (2007-08) and Chairman of Unilever – North Africa & Middle East (2008 – September 2013).
Hindustan Unilever Ltd: Best Stock to Buy For Long-Term in India
OVERVIEW OF FMCG INDUSTRY
Hindustan Unilever Limited operates in the Fast-Moving Consumer Goods (FMCG) industry which continues to be one of the biggest structural opportunities that our country offers. Despite being one of the fastest-growing markets globally for FMCG products, the per capita FMCG consumption in India is still amongst the lowest in the world, giving the industry a long runway for growth
COMPANY PERFORMANCE IN 2019-2020
STRATEGY USED BY COMPANY
Growth Segments:
The company continues to focus on strengthening core brands, accelerating premiumization of the portfolio, driving market development at scale, and building a strong innovation pipeline.
Growth Channels:
The company continues to bolster its position by playing the strength of its portfolio in each channel.
Growth Engines:
Each division is leveraging new opportunities to keep the growth engine running by exploring new marketing models, de-averaging opportunities using Winning in Many Indias (WiMi), building future formats and benefits, and leveraging M&A to expand the portfolio.
Purpose-led brands:
The company continues to put an unequivocal focus on building brands with purpose that take a stand and make a positive difference to the society and environment.
PURPOSEFUL BRANDS STRENGTHENING CORE
- HUL is the No. 1 Laundry Company in India
- HUL is the No.1 Hair Care company in india
- HUL is the No. 1 Tea company in India
MARKET DEVELOPMENT
LEVERAGE M&A TO EXPAND PORTFOLIO
DRIVE PREMIUMIZATION
PAST PERFORMANCE
SALES & PROFIT GROWTH
| Year | Sales | Growth | Profit | Growth |
|---|---|---|---|---|
| 2010 | 17,738 | 2,157 | ||
| 2011 | 20,023 | 12.88% | 2296 | 6.45% |
| 2012 | 23,436 | 17.05% | 2790 | 21.54% |
| 2013 | 27,004 | 15.22% | 3828 | 37.21% |
| 2014 | 29,234 | 8.26% | 3945 | 3.04% |
| 2015 | 31,972 | 9.37% | 4363 | 10.58% |
| 2016 | 32,186 | 0.67% | 4151 | -4.86% |
| 2017 | 33,162 | 3.03% | 4476 | 7.83% |
| 2018 | 35,545 | 7.19% | 5214 | 16.49% |
| 2019 | 39,310 | 10.59% | 6054 | 16.11% |
| 2020 | 39,783 | 1.20% | 6748 | 11.46% |
The company’s sales have grown CAGR 8.41% over the last 10 years and profit have grown CAGR 12.08% over the last 10 years.
The growth in profits here is more than the growth in sales. This is mainly due to the expansion in the profit margin. It shows management capability
Return on Capital Employed
Return on Capital Employed (ROCE) is a financial ratio that measures a Company’s profitability and the efficiency with which its capital is used. In other words, the ratio measures how well a company is generating profits from its capital.
| Year | ROCE(%) |
| 2010 | 103% |
| 2011 | 99% |
| 2012 | 106% |
| 2013 | 131% |
| 2014 | 148% |
| 2015 | 140% |
| 2016 | 112% |
| 2017 | 91% |
| 2018 | 103% |
| 2019 | 116% |
| 2020 | 117% |
Return on Equity
| 10 Years | 82.81% |
| 5 Years | 77.51% |
| 3 Years | 80.97% |
| Last Years | 85.62% |
Data taken from screener.in
Dividend History
Hindustan Unilever Ltd. has declared 41 dividends since March 27, 2001.
In the past 12 months, Hindustan Unilever Ltd. has declared an equity dividend amounting to Rs 25.00 per share.
| Ex-Date | Dividend Amount |
|---|---|
| June 19, 2020 | 14.00 |
| Oct. 23, 2019 | 11.00 |
| June 20, 2019 | 13.00 |
| Oct. 25, 2018 | 9.00 |
| June 21, 2018 | 12.00 |
| Nov. 1, 2017 | 8.00 |
| June 22, 2017 | 10.00 |
| Nov. 1, 2016 | 7.00 |
| June 22, 2016 | 9.50 |
| Oct. 19, 2015 | 6.50 |
| June 19, 2015 | 9.00 |
| Oct. 31, 2014 | 6.00 |
| June 11, 2014 | 7.50 |
| Oct. 31, 2013 | 5.50 |
| July 10, 2013 | 6.00 |
| Nov. 1, 2012 | 12.50 |
| July 4, 2012 | 4.00 |
| Nov. 4, 2011 | 3.50 |
| July 8, 2011 | 3.50 |
| Nov. 1, 2010 | 3.00 |
| July 8, 2010 | 3.50 |
| Nov. 6, 2009 | 3.00 |
| June 12, 2009 | 4.00 |
| Aug. 4, 2008 | 3.50 |
| March 17, 2008 | 3.00 |
| Nov. 7, 2007 | 3.00 |
| Aug. 7, 2007 | 3.00 |
| April 20, 2007 | 3.00 |
| Aug. 8, 2006 | 3.00 |
| April 28, 2006 | 2.50 |
| Aug. 8, 2005 | 2.50 |
| June 7, 2005 | 2.50 |
| Aug. 13, 2004 | 2.50 |
| May 14, 2004 | 3.00 |
| Aug. 14, 2003 | 2.50 |
| June 20, 2003 | 0.00 |
| April 4, 2003 | 3.00 |
| Aug. 7, 2002 | 0.00 |
| April 8, 2002 | 2.50 |
| July 16, 2001 | 2.50 |
| March 27, 2001 | 0.00 |
Economic Value Added
EVA is residual income after charging the Company for the cost of capital provided by lenders and shareholders. It represents the value added to the shareholders by generating operating profits in excess of the cost of capital employed in the business.
SHARE PRICE PERFORMANCE
In 2005, HUL’s share price was Rs. 132 and today it is Rs. Is 2,224.
If you calculate the return, the company has given CAGR 20.72% return in 15 years.
If someone had invested Rs 1 lakh in 2005, he would have Rs 16.85 lakh today
Reason to Invest in Hindustan Unilever for long Term
- HUL is an Indian MNC company. So there is no issue with corporate governance.
- Management is honest and competent.
- The company has been growing at a steady pace over the last 10 years in both sales and profits.
- ROCE is very high above 100%. A very few companies can achieve this
- ROE is very high
- The company distributes surplus profits to its shareholders through dividends
Subsidiary Companies
| 1 | Unilever India Exports Limited | 100% |
| 2 | Pond’s Exports Limited | 90% |
| 3 | Lakme Lever Private Limited | 100% |
| 4 | Unilever Nepal Limited | 80% |
| 5 | Daverashola Estates Private Limited | 100% |
| 6 | Jamnagar Properties Private Limited | 100% |
| 7 | Levers Associated Trust Limited | 100% |
| 8 | Levindra Trust Limited | 100% |
| 9 | Hindlever Trust Limited | 100% |
| 10 | Hindustan Unilever Foundation | 76% |
| 11 | Bhavishya Alliance Child Nutrition Initiatives | 100% |
Top 10 Shareholders
| 1 | Life Insurance Corporation of India |
| 2 | Vanguard Total International Stock Index Fund |
| 3 | ICICI Prudential Life Insurance Company Limited |
| 4 | SBI-ETF NIFTY 50 |
| 5 | Vanguard Emerging Markets Stock Index Fund, A Series |
| 6 | Government of Singapore |
| 7 | General Insurance Corporation of India |
| 8 | The New India Assurance Company Limited |
| 9 | Government Pension Fund Global |
| 10 | People’s Bank of China |
