Hindustan Unilever Ltd- History- CEO & Case Study

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 core Brand

Hindustan Unilever Ltd Products List – A Complete Guide

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
1Unilever PLC51.48
2Brooke Bond Group Limited4.93
3Unilever Overseas Holdings AG3.18
4Unilever UK & CN Holdings Limited2.78
5Brooke Bond South India Estates Limited 52.44
6Brooke Bond Assam Estates Limited1.52
7Unilever Overseas Holdings B. V0.87
Total67.18%

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

Hindustan Unilever Ltd segment revenue

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
Hindustan Unilever Ltd Laundry category performance
  • HUL is the No.1 Hair Care company in india
Hindustan Unilever Ltd Hair Care segments performance
  • HUL is the No. 1 Tea company in India
Hindustan Unilever Ltd Tea category performance

MARKET DEVELOPMENT

HUL MARKET DEVELOPMENT

LEVERAGE M&A TO EXPAND PORTFOLIO

HUL LEVERAGE M&A

DRIVE PREMIUMIZATION

HUL DRIVE PREMIUMIZATION

PAST PERFORMANCE

SALES & PROFIT GROWTH

YearSalesGrowthProfitGrowth
201017,7382,157
201120,02312.88%22966.45%
201223,43617.05%279021.54%
201327,00415.22%382837.21%
201429,2348.26%39453.04%
201531,9729.37%436310.58%
201632,1860.67%4151-4.86%
201733,1623.03%44767.83%
201835,5457.19%521416.49%
201939,31010.59%605416.11%
202039,7831.20%674811.46%

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.

YearROCE(%)
2010103%
201199%
2012106%
2013131%
2014148%
2015140%
2016112%
201791%
2018103%
2019116%
2020117%

Return on Equity

10 Years82.81%
5 Years77.51%
3 Years80.97%
Last Years85.62%

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-DateDividend Amount
June 19, 202014.00
Oct. 23, 201911.00
June 20, 201913.00
Oct. 25, 20189.00
June 21, 201812.00
Nov. 1, 20178.00
June 22, 201710.00
Nov. 1, 20167.00
June 22, 20169.50
Oct. 19, 20156.50
June 19, 20159.00
Oct. 31, 20146.00
June 11, 20147.50
Oct. 31, 20135.50
July 10, 20136.00
Nov. 1, 201212.50
July 4, 20124.00
Nov. 4, 20113.50
July 8, 20113.50
Nov. 1, 20103.00
July 8, 20103.50
Nov. 6, 20093.00
June 12, 20094.00
Aug. 4, 20083.50
March 17, 20083.00
Nov. 7, 20073.00
Aug. 7, 20073.00
April 20, 20073.00
Aug. 8, 20063.00
April 28, 20062.50
Aug. 8, 20052.50
June 7, 20052.50
Aug. 13, 20042.50
May 14, 20043.00
Aug. 14, 20032.50
June 20, 20030.00
April 4, 20033.00
Aug. 7, 20020.00
April 8, 20022.50
July 16, 20012.50
March 27, 20010.00

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.

EVA
Economic Value Added of Hindustan Unilever Ltd

SHARE PRICE PERFORMANCE

SHARE PRICE PERFORMANCE of hul

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

1Unilever India Exports Limited100%
2Pond’s Exports Limited90%
3Lakme Lever Private Limited100%
4Unilever Nepal Limited80%
5Daverashola Estates Private Limited100%
6Jamnagar Properties Private Limited100%
7Levers Associated Trust Limited100%
8Levindra Trust Limited100%
9Hindlever Trust Limited100%
10Hindustan Unilever Foundation76%
11Bhavishya Alliance Child Nutrition Initiatives100%

Top 10 Shareholders

1Life Insurance Corporation of India
2Vanguard Total International Stock Index Fund
3ICICI Prudential Life Insurance Company Limited
4SBI-ETF NIFTY 50
5Vanguard Emerging Markets Stock Index Fund, A Series
6Government of Singapore
7General Insurance Corporation of India
8The New India Assurance Company Limited
9Government Pension Fund Global
10People’s Bank of China

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