Hindustan Unilever: Q1 improves earnings outlook despite uncertainty

Synergy benefits from GSK Consumer merger, VWash buy give leg up to firm's portfolio

Hindustan Unilever’s (HUL’s) numbers in the first quarter of the financial year 2020-21 (Q1FY21), reported after market hours on Tuesday, beat Street estimates on the volume and operating profit fronts, and also indicated potential for earnings upgrades. This should lift sentiment for the stock, which is up 26 per cent from its March lows.

Strong support from its resilient portfolio and improved cost efficiency, along with synergy benefits from the merger of GSK Consumer, bode well for HUL.

Although the Q1 numbers are not strictly comparable because GSK Consumer’s merger came into effect from April 1, HUL’s top line grew by 4.2