Reviews
In this edition, we have reviewed Hindustan Unilever Ltd. and J B Chemicals and Pharmaceuticals Ltd. We suggest our reader-investors to HOLD in Hindustan Unilever Ltd. and J B Chemicals and Pharmaceuticals
We had previously recommended Hindustan Unilever Limited (HUL) in Volume No. 35, Issue No. 10 under the ‘Cover Story’ segment. The recommended price for the stock was Rs2,444.60. We had recommended the company on the basis of its robust business model and predicted growth in operations.
Hindustan Unilever is a consumer goods’ company based in India which deals in products comprising home and personal care, foods and refreshments. As regards the financial performance of HUL, we can see that on a consolidated quarterly basis the net sales jumped to Rs12,181 crore in Q3FY21 as compared to Rs10,103.00 crore in Q3FY20, posting an increase of 20.57 per cent. The operating profit increased by 14.54 per cent from Rs2,634.00 crore in Q3FY20 to Rs3,017.00 crore in Q3FY21.
Meanwhile, the net profit surged by 18.82 per cent in the quarter which came in at Rs1,938 crore in Q3FY21 as compared to net profit of Rs1,631 crore in Q3FY20. On an annual basis, the net sales inched up by 1.2 per cent from Rs39,310 crore in FY19 to Rs39,783 crore in FY20.
On the other hand, the operating profit increased by 11.27 per cent in FY20 as compared to FY19. The net profit on an annual basis rose by 11.49 per cent at Rs6,756 crore in FY20 as compared to Rs6,060 crore in FY19. Up to 86 per cent
The domestic consumer business growth has also gained momentum. The company focuses on investing in consumer-centric innovations, market development and capabilities. Hence, we recommend HOLD.
We had previously recommended J B Chemicals and Pharmaceuticals Ltd. in Volume No. 35, Issue No. 25 under the ‘Choice Scrip’ segment. The recommended price for the stock was Rs979.35. We had recommended the stock on the basis of the company’s positive outlook on demand in the chemical s ec tor.
J B Chemicals and Pharmaceuticals Limited is a pharmaceutical company which is an integrated, research-oriented organisation, focused on supplying products both in India and international markets. The financial performance of the company indicates that on a consolidated quarterly basis the net sales were recorded at Rs548.22 crore in Q3FY21 as compared to Rs428.63 crore in Q3FY20, an increase of 27.9 per cent. The operating profit substantially increased from Rs105.98 crore in Q3FY20 to Rs226.94 crore in Q3FY21.
Its net profit significantly surged up in the quarter, registering at Rs154.11 crore in Q3FY21 as compared to net profit of Rs66.28 crore in Q3FY20. On an annual basis, its net sales rose by 8 per cent from Rs1,643.20 crore in FY19 to Rs1,774.73 crore in FY20. The operating profit increased by 23.31 per cent in FY20 as compared to FY19. Its net profit on an annual basis rose by 40.43 per cent at Rs272.39 crore in FY20 as compared to Rs193.97 crore in FY19.
The company has reported that the of the business has gained penetration in the third quarter of FY21. The domestic consumer business growth has also gained momentum. The company focuses on investing in consumer-centric innovations, market development and capabilities. Hence, we recommend HOLD.
(Closing price as of April 19, 2021)