HUL: Royalty hike hit to worry Dalal Street even as HUL stays resilient


The management is cautiously optimistic in the near term as it expects the worst of the inflation to be over, leading to a gradual recovery in consumer demand.


Under the new terms, the royalty is set to increase 80 basis points (0.8 percentage points) in a staggered way from 2.65% of revenue to 3.45% over a period of three years. Considering the consolidated revenue of 2021-22, an 80 bps increase in royalty on ₹51,400 crore translates to around ₹400 crore. This, compared to the net profit of ₹9,000 crore, is not an insignificant amount.

ET Intelligence Group: Hindustan Unilever’s third quarter performance, while being good, was overshadowed by the company’s announcement of an increase in the royalty that it pays to its parent Unilever. Investors are likely to react negatively to this announcement rather than to the good quarterly performance. In January 2013, when the company announced an increase in royalty, the company’s stock opened 6.5% lower the next day. Under the new

  • SAVE

Uh-oh! This is an exclusive story available for selected readers only.

Worry not. You’re just a step away.

Congratulations! This story is unlocked for you.

We’ve rewarded you with ET Prime access for 30 days!

Clean ad-free reading experience on The Economic Times

Unlimited access to exclusive stories & insights across 20+ sectors

In-depth reports on 4000+ Stocks, updated daily

Complete access to ET Print Edition, the digital newspaper

Activate your Access

No card details required

Why ?

  • Exclusive Economic Times Stories, Editorials & Expert opinion across 20+ sectors

  • Stock analysis. Market Research. Industry Trends on 4000+ Stocks

  • Clean experience with
    Minimal Ads

  • Comment & Engage with ET Prime community

  • Exclusive invites to Virtual Events with Industry Leaders

  • A trusted team of Journalists & Analysts who can best filter signal from noise



Read original article here

Denial of responsibility! TechnoCodex is an automatic aggregator of the all world’s media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials, please contact us by email – [email protected]. The content will be deleted within 24 hours.

Leave a comment