Hindustan Unilever and Nestle India announce Q2 results, declare interim dividends

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Hindustan Unilever and Nestle India announce Q2 results, declare interim dividends
Credit: © Reuters.

In a recent financial update, Hindustan Unilever (LON: ULVR ) (HUL) and Nestle (NS: NEST ) India reported their Q2 FY24 results. Despite a challenging operating environment marked by high competition and subdued rural demand, both companies declared interim dividends.

On Thursday, HUL reported a slight decrease in Q2 profit to Rs 2,656 crore but surpassed the CNBC TV18 poll revenue predictions. The company's total income rose by 3.6% to Rs 15,806 crore from last year's Rs 15,253 crore. Total sales reached Rs 15,364 crore, with the EBITDA standing at Rs 3,797 crore, reflecting a margin of 24.7%. A one-off credit from the resolution of past indirect tax litigation positively impacted turnover and PAT growth by 1% and 4%, respectively. HUL declared an interim dividend of Rs 18 per equity share for FY24. As per InvestingPro Tips, HUL is a prominent player in the Personal Care Products industry, holding more cash than debt on its balance sheet, and has maintained dividend payments for 23 consecutive years. The company also yields a high return on invested capital, which is an encouraging sign for potential investors.

Meanwhile, Nestle India's Q2 FY24 consolidated net profit surged by 36% to Rs. 908 crore from the previous year's Rs. 668.3 crore. The total revenue also increased by 9.6% to Rs. 5,036 crore, surpassing last year's Rs. 4,591 crore and brokerage poll predictions of Rs. 5,177.1 crore in revenue and Rs. 841.4 crore in net profit. Domestic sales grew by 10.3%, driven by volume and pricing factors. According to InvestingPro's real-time metrics, Nestle India's revenue growth for LTM2023.Q2 was 44.1%, and the company's gross profit stood at 120.14M USD, reflecting its impressive gross profit margins.

However, EBITDA rose by just 1.6% to reach Rs. 1,225 crore from an estimated Rs. 1,205 crore; the EBITDA margin dropped by 220 basis points to 24.3% YoY from 22.1%. The company flagged concerns about weather conditions negatively affecting the production of sugar, maize, oilseeds, spices, and wheat and causing coffee volatility due to an international supply deficit. Nevertheless, stable milk prices are anticipated due to a healthy milk flush.

Nestle India announced a second interim dividend of Rs. 140 per equity share of Rs. 10 for 2023, payable from November 16 with a record date of November 1. The company also approved a share split in a ratio of 1:10 and noted the stock traded at Rs. 23,490. InvestingPro Tips highlight that Nestle India operates with a high return on assets and has maintained dividend payments for 23 consecutive years, making it a reliable choice for investors. The company is also a prominent player in the Food Products industry, further solidifying its position in the market. For more insights, readers can explore the 20 additional tips provided by InvestingPro here.

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