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INDIRA SCHOOL OF BUSINESS STUDIES

Report on: HINDUSTAN UNILEVER LIMITED

Report by: Group- 08 ,Div-E

Report date: 24-November-20011

Report content:

Section Heading Pg. no Word count

Executive summary. 2- 3 1,003

Introduction to HUL. 4-13 2,244

Current performance of HUL. 14-20 1,687

Dimensions of HUL. 21-26 2,206

Future direction of HUL. 27-28 954

Executive summary

1- CHANDRA SHEKHAR KUMAR E-23

2- ABHISHEK KUMAR AMAR E-05

3- CHETAN TANDON E-24

4- ANSHU KUMAR E-12

5- ASHISH UPADHYAY E-17

6- ATUL NANAVATI E-18

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HUL works to create a better future every day and helps people feel good, look good and get more out of life with brands and services that are good for them and good for others. The Company has over 16,000 employees and has an annual turnover of around Rs.19, 401 crore (financial year 2010 - 2011). HUL is a subsidiary of Unilever, one of the world’s leading suppliers of fast moving consumer goods with strong local roots in more than 100 countries across the globe with annual sales of about €44 billion in 2011. Unilever has about 52% shareholding in HUL. Hindustan Unilever is one of the leading FMCG manufacturing companies in India. The company's FMCG products include all types of daily use products. The company also provides finance for its distributors. The company primarily operates India, Bhutan, Nepal, US, Australia, South Korean, South Africa, Turkey, Sri Lanka and Russia, etc. Its headquarter is in Mumbai, India and employed direct and indirect more than 65,000 people as on March 31, 2008. The year 2010-2011 has been an eventful and satisfying year for the business. Their net sales are increased by 10.7% which is a good double digit growth as compared to its competitors. HUL has shown double digit volume growth of 13%.Pure-it grew strongly and has until covered 4.5 million homes. Due to their project of Shakti Amma their direct retail coverage in rural areas is increased by 600000. HUL provide income generating opportunities to 45000 shakti entrepreneurs in rural areas across 15 states in 100000 villages through project Shakti and Hindustan Unilever Ltd is positioned as market leader in the F.M.C.G industry. It is a very well established brand and claims that two out of three Indian uses its products. Company has got a very vast distribution network and a strong supply chain network to support. Despite having a slight decrease in the market share the company has been able to maintain its profitability.

Company dimension of H.U.L lead in different part as it is the subsidiary of Anglo-Dutch Company Unilever.

The parent company (Unilever) holds 52% stake in H.U.L.thats why its hold the decision making authority and

remaining share to Indian counterpart. .As the company is very old so the company’s organizational structure

is very well placed and the company has produced many successful business managers. The organization is

divided in four different functions. Each headed by a functional head. All these functional heads report to the

chairman. The Board of Directors appoints the chairman and the C.E.O The company has non-executive

Directors, Executive Directors as well as management committees which look into different operations. The

different functions report to the vertical head as well as co-ordinate at the horizontal level. : The Company

grew organically through its own expansion and new launches. The size of the market increased and new

products were introduced in the market. The company launched new products in various categories and this

helped the company to grow its market. Company maintained its growth rate in double-digit. New products

which were launched also captured the market very well. . Most of the segments saw good increase in their

sales. There was large volume growth overall. The business saw growth across all segments. The Home and

Personal Care business grew by 9.8 per cent with competitive growth in both Laundry and Personal Wash.

Personal Products business grew strongly at 15.7 per cent. Growth was broad based across categories with

Skin Care delivering a particularly strong performance. Water purifier brand, Pureit, grew strongly and

continued to expand its franchise with product offerings across multiple prices. The company did not have any

joint ventures with any other firm but plans to open so in the near future as the competition is increasing with

more players coming in the market.

The Company did not have any merger or acquisition in previous 3-4 years. One major incident happened in 2007 when the parent Unilever Company acquired the majority stake (52%) and the name of company was changed to Hindustan Unilever Limited.

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The Company has two research and development centers in India. The company focuses on sustainable growth. The company spends a good amount of its money in research & development. The company focuses on saving water as it will be scarce in quantity till 2030. As India is focusing on preserving water for future as water will become scarce. Company has been actively performing corporate social responsibility for long. Their schemes have been high point and earned them a good-will in the market. Keeping an eye on water scarcity in the future both for consumption and for drinking Purposes Company looks to store water in its surrounding areas and also consume less water.The Fair & Lovely Foundation is HUL's initiative which aims at economic empowerment of women across India. It aims to achieve this through providing information, resources, inputs and support in the areas of education, career and enterprise. It specifically targets women from low-income groups in rural as well as urban India. Fair & Lovely, as a brand, stands on the economic empowerment platform and the Foundation is an extension of this promise. The Foundation has renowned Indian women, from various walks of life, as its advisors. Among them are educationists, NGO activists, physicians. The Foundation is implementing its activities in association with state governments. supply chain network to support. Company always look for innovations and come up with new and improved products. It serves the old market so they emphasize on market penetration and product innovations. In sync with Indian demands they come with valuable products which provide values to customers. They try to have a good penetration in rural areas to increase their sales. They always work to have a sustainable growth. The company has been able to maintain its leadership position for long and has a very established organization structure. It has produced many business leaders in India. The company aims to grow further and want to add 300 million untrapped market in India .

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INTRODUCTION OF HUL

HUL works to create a better future every day and helps people feel good, look good and

get more out of life with brands and services that are good for them and good for others.

Hul product category such as soaps, detergents, shampoos, skin care, toothpastes,

deodorants, cosmetics, tea, coffee, packaged foods, ice cream, and water purifiers, the

household brands such as Lux, Lifebuoy, Surf Excel, Rin, Wheel, Fair & Lovely, Pond’s,

Vaseline, Lakmé, Dove, Clinic Plus, Sunsilk, Pepsodent, Closeup, Axe, Brooke Bond, Bru,

Knorr, Kissan, Kwality Wall’s and Pureit.

The Company has over 16,000 employees and has an annual turnover of around Rs.19,

401 crores (financial year 2010 - 2011). HUL is a subsidiary of Unilever, one of the world’s

leading suppliers of fast moving consumer goods with strong local roots in more than 100

countries across the globe with annual sales of about €44 billion in 2011. Unilever has

about 52% shareholding in HUL. Hindustan Unilever is one of the leading FMCG

manufacturing companies in India. The company's FMCG products include all types of daily

use products. The company also provides finance for its distributors. The company

primarily operates India, Bhutan, Nepal, US, Australia, South Korean, South Africa, Turkey,

Sri Lanka and Russia, etc. It is headquartered in Mumbai, India and employed direct and

indirect more than 65,000 people as on March 31, 2008. The company recorded revenues

of INR199871.5 million during the financial year ended March 2011, an increase of 11.82%

over 2010. The operating profit of the company was INR27,301.8 million during FY ended

on March 2011, a increase of 0.85% compared to 2010. The net profit was INR23,059.7

million in FY2011, a increase of 4.72% compared to 2010.

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HUL HISTORY

In the summer of 1888, visitors to the Kolkata harbour noticed crates full of Sunlight soap bars,

embossed with the words "Made in England by Lever Brothers". With it, began an era of marketing

branded Fast Moving Consumer Goods (FMCG)

In 1918 Vanaspati was launched in and the famous Dalda brand came to the market in 1937.

In 1931, Unilever set up its first Indian subsidiary, Hindustan Vanaspati Manufacturing

Company, followed by Lever Brothers India Limited.

In 1956 three companies merged to form hul in November.

In 1984 broke bond joined the unilever fold through an international acquisition.

IN 1985 Lifebuoy and other famous brands like Pears, Lux and Vim launches.(1918)

In 1898(Lipton’s links with India were forged. Unilever acquired Lipton in 1972 and in 1977

Lipton Tea (India) Limited was incorporated.)

Since 1947 Pond's (India) Limited had been present in India. It joined the Unilever fold through

an international acquisition of Chesebrough Pond's USA in 1986.

In 1991 the liberalization of the Indian economy started &clearly marked an inflexion in HUL's

and the Group's growth curve.

In 1992, the erstwhile Brooke Bond acquired Kothari General Foods, with significant interests in

Instant Coffee.

In April 1993 Tata Oil Mills Company (TOMCO) merged with HUL, 

In 1993, it acquired the Kissan business from the UB Group and the Dollops Ice-cream business

from Cadbury India.

In 1994 HUL formed a 50:50 joint venture with the US-based Kimberly Clark Corporation. ,

Kimberly-Clark Lever Ltd, which markets Huggies Diapers and Kotex Sanitary Pads.

In january1994, Brooke Bond India and Lipton India merged to form Brooke Bond Lipton India

Limited (BBLIL), factory represents the largest manufacturing investment in the Himalayan

kingdom. Finally, BBLIL merged with HUL.

In 1996, HUL and yet another Tata company, Lakme Limited, formed a 50:50 joint venture.

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In 1998, Lakme Limited sold its brands to HUL and divested its 50% stake in the joint venture to

the company.

HUL has also set up a subsidiary in Nepal, Unilever Nepal Limited (UNL),

In January 2000, in a historic step, the government decided to award 74 per cent equity in

Modern Foods to HUL

In 2001 HUL launched a slew of new business initiatives in the early part of 2000’s. Project

Shakti,  It is a rural initiative that targets small villages . Currently, there are over 45,000 Shakti

entrepreneurs covering over 100,000 villages across 15 states and reaching to over 3 million

homes.

In 2002, HUL acquired the government's remaining stake in Modern Foods.

In 2002, HUL made its foray into Ayurveda health & beauty Centre .

IN 2004, HUL launch pure it water purifier.

In 2007, the Company name was formally changed to Hindustan Unilever Limited. On 17th

October.

Products & Services

HUL is a FMCG manufacturing company in India. The company's key products and services include the following:

Products:

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Personal Wash:- Lux, Lifebuoy, Liril, Ham am, Breeze, Dove, Pears and Rexona

Laundry:- Surf Excel, Sun Light, Rin, Wheel & Ala Bleach

Dishwasher:- Vim

Foods:- Kissan(Jam, ketchup, squashes), Annapurna(aata, salt), Knorr soups, Modern Bread

Ice-cream:- Kwality wall’s

Tea:- Brooke Bond, Lipton, Taj Mahal

Coffee:- Brooke bond, Bru

Cosmetic Products:- Fair & Lovely, Lakme, Ponds and Vaseline.

Hair-Care:- Sun silk, Clinic plus, Dove, Life-buoy

Oral-Care:- Pepsodent, Colgate, Close-up

Deo-Spray:- Axe and Rexona.

Soaps And Detergents : Company has got many different products in this category and caters to different income groups. Major Products offered are Rin, Rexona, Hamam, Lux, Rin,Pears, Liril,Vim,Wheel, Surf Excel, Dove, Lifebuoy. While Wheel Rexona are targeted at low income group Surf Excel Dove are targeted at the premium class Some of the soaps are very old and are household names while some are comparatively new. Company has been able to identify the requirements of different segments and have delivered to them.

Personal Products: This category includes sub- categories like skin care, hair care, oral care,Deodorants, colour and cosmetics. Company offers a wide array of products in all the different sub categories. Company’s biggest brand in cosmetics is Pond’s. Similarly different products in other categories are offered like Close-Up,Fair& Lovely Axe Elle 18 Dove, Sunsilk Clinic Plus Livon etc. Different products are offered keeping in mind different income groups. Here the company is able to connect itself to different age groups as per their requirements.

Beverages: This segment includes the segment of tea and coffee. Company has got many brands like Brooke Bond, Red Label, Taj Mahal Bru in this category. Bru is a comparatively new product and company has also offered its different variants. Taj Mahal tea is targeted at the premium segment whereas, Red Label is targeted at the low income group. Taj Mahal is also marketed in the tea bag industry.

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Processed Foods: The Company had a major brand in this segment “Kissan” Ketchup. Different Variants were also launched of kissan ketchup. Company launched its Knorr Soups there after. Later Knorr soup noodles were launched which created a rage in the market. Company also owns the Modern brand of foods.

Ice-Creams: In this segment the company has got a very popular brand Kwality Walls. There are three main variants . Cornetto, Paddle Pop and Selection Take Home Tubs, which are popular with youth, children and families. The has been very successful and has a presence all over.

SEGMENTAL REVENUE

Soaps and Detergents 44.6%

Personal Products 29.7%

Beverages 11.9%

Processed Foods 4.6%

Ice creams 1.4%

Exports 5.6%

Others 2.2%

44.60%

29.70%

11.90%

44.60%

1.40% 5.60%2.20%

Sales in%

soap &detergentspersonal productbeverageprocessed foodsice creamexportsother

Here we can see how the company earns its revenue from different category and its position in different categories is:

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In Soaps and Detergent sector the company is at the top. In personal care company is at top in skin care hair care and is second in oral

care. Company is at second position in Beverages category. In Processed foods category the company entered new whereas, existing brands

were at top In ice creams the company is at first position. The company export are maximum and is the biggest exporter in the industry. In the water industry the company sells maximum number of machines in its

category.

The sector overall face neck to neck competition among rivals as shown by different advertisement programmes. Many new segments have been identified and new companies are coming up in different categories like ITC P&G Marico, etc.

Despite increase in the volume of sales there has been a decline in the market share of many products in different categories. Company is trying to retain and regain its market share. Company always try to come up with new and innovative products so as to maintain its position as leader.

MARKET AND REVENUE

Market & Revenues

HUL serves in all the countries of different continents except Antarctica. The company serves in more than 180 countries across the globe. The company operates in the entire major as well as small nations. On a given day around 2 billion people use products offered by the company worldwide The company has got its presence in developed as well as developing or emerging markets. The company has managed to keep a good balance of its revenues earned from different parts of the world. 53% of the total revenue of the company comes from emerging economies whereas remaining 47% come from developed economies. The revenues earned from different continents are also in proportions to their population. The company is very old(more than 100 years) in Europe and has also got more than 50 years of experience of operating in emerging economies like Brazil, China India etc which helps the company to understand the local market requirements as well.

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.

.

In INDIA the company is positioned as the leader having a market share of 52%. In the year 2010-2011 the company had total sales of Rs. 20,305.54crores. The company claims that two out of three Indians use the company’s products. As indicated by the overall market share the company is placed at top in many categories in which it operates. The company is placed at top in categories like soaps, laundry, hair care, home care, skin care & deodorant.

The companies understand the Indian market well and make products that suit the local people and their demand. The company also spends a significant amount on its Research & Development (R&D) to come up with new and innovative products. Company follows the channel distribution strategy to reach out to its customers. It has a vast number of dealers and distributors. Company’s products are easily available all over.

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MISSION OF HUL

Mission of The Company:

The four pillars of our vision set out the long term direction for the company – where we want to go and how we are going to get there:

We work to create a better future every day We help people feel good, look good and get more out of life with brands and

services that are good for them and good for others. We will inspire people to take small everyday actions that can add up to a big

difference for the world. We will develop new ways of doing business with the aim of doubling the size of our

company while reducing our environmental impact.

Purpose & principles:

STARLux, sunsilk, fair & lovely, Kissan ketchup and Surf

excel.

?Rin, Pepsodent, Domex

COW

Axe, Vaseline jelly

DOGS

Wheel

Growth matrix of HUL

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Our corporate purpose states that to succeed requires "the highest standards of corporate behaviour towards everyone we work with, the communities we touch, and the environment on which we have an impact."

Always working with integrity Positive impact  Continuous commitment Setting out our aspirations  Working with others

Always working with integrity

Conducting our operations with integrity and with respect for the many people, organisations and environments our business touches has always been at the heart of our corporate responsibility.

Positive impact 

We aim to make a positive impact in many ways: through our brands, our commercial operations and relationships, through voluntary contributions, and through the various other ways in which we engage with society. 

Continuous commitment

We're also committed to continuously improving the way we manage our environmental impacts and are working towards our longer-term goal of developing a sustainable business.

Setting out our aspirations 

Our corporate purpose sets out our aspirations in running our business. It's underpinned by our code of business Principles which describes the operational standards that everyone at Unilever follows, wherever they are in the world. The code also supports our approach to governance and corporate responsibility.

Working with others

We want to work with suppliers who have values similar to our own and work to the same standards we do. Our Business partner code, aligned to our own Code of business principles, comprises ten principles covering business integrity and responsibilities relating to employees, consumers and the environment.

Vision: Unilever products touch the lives of over 2 billion people every day – whether that's through feeling great because they've got shiny hair and a brilliant smile, keeping their homes fresh and clean or by enjoying a great cup of tea, satisfying meal or healthy snack.

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Company goal:

Company goal is to build capability of our people so as to enable them to grow markets with innovative solutions and make a difference to India and create a competitive, profitable and sustainable business.

Company Approach:

Our biggest asset is our people and they are the central pillar that supports our growth agenda. We nurture, care and drive our people to fulfil their optimal potential. We enable them to develop new skills to stay on top of the success curve. The key action areas are:

Build capabilities of our people

Ensure employee health and safety

Instilling values

SOURCE OF INFORMATION

ANNUAL REPORT OF HUL 2010-2011 , 2009-2010. www.hul.co.in www.irish.com

CURRENT PERFORMANCE OF HINDUSTAN UNILEVER LIMITED

INTERNAL COMPARATIVE ANALYSIS OF HINDUSTAN UNILEVER LIMITED

Comparative profit and loss account of Hindustan Unilever Limited

Particulars 2007-2008 2008-2009 2009-2010 2010-2011 PercentageChange

Net sales13675.43 16191.46 17523.80 19401.11

(10.71% inc.)41.86%

Other Operational

Income

193.66 307.34 201.53 334.09 72.51%

TOTAL13869.09 16498.8 17725.33 19735.20

(11.34% inc.)42.29%

Operating cost and expense

(11796.77) (14066.64) (14975.36) (17035.90)(13.75% inc)

44.41%

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PBDIT 2072.32 2432.15 2749.97 2699.30(1.81% dec.)

30.25%

Depreciation (138.36) (156.24) (184.03) (220.83)(20% inc)

59.76%

PBIT 1933.96 2275.91 2565.94 2478.78(3.39% dec.)

28.17%

Interest income(net)

212.37 144.18 141.13 251.71(78.35% inc.)

18.39%

PBT 2146.33 2420.09 2707.07 2730.18 27.20%

Taxation (403.21) (419.52) (604.39) (576.93) 43.08%

PAT 1743.12 2000.56 2102.68 2153.25 23.52%

Exceptional/ extraordinary

item

182.35 (3.40) 99.35 152.72(53.71% inc.)

-16.25%

Net Profit 1925.47 1997.16 2202.03 2305.97(4.67% inc.)

19.76%

Basic EPS (Rs) 8.73 9.168 10.10 10.58 21.19% (source- www.hul.co.in)

ANALYSIS:

In the year 2011 total sales of Hindustan unilever limited is increased by 10.7%, which is a good double digit growth. This sale is increased due to increase in their direct retail coverage in rural areas. In these 4 years sales is increase by 41.86%.

Their direct retail coverage is tripled due to increase in their retail outlet by 6,00,000.

This year hul has shown a double digit volume growth of 13%.

Top line of the company has been decrease by 1.8% due to increase in the operating cost.

Domestic consumer business is grown by 10.9%.

Home and personal care business is grown by 9.8% with competitive growth in laundry and personal wash.

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Their strongest growth is shown in personal product business which is 15.7%.

Pure-it, one of the product of HUL grew strongly. It is now covering more than 4.5 million homes.

During year 2011 total assets of HUL was increased by approx. 2% due to which depreciation was increased by 20% and during the 5 years fixed assets was increased by 63%. This leads to continuous increase in depreciation.

The operating cost of the company have been increased by 206054cr this yr as compare to 2010 which effect the net profit of the company. According to the financial report of the company the main reason in the increase in the operating cost of the company is the increase in the cost of raw material and increase in the price of the oil.

Over the four years the operating cost and expense is increased by 44% this is all due to increase in the advertisement expenses which increases due to tough competition and major reason was inflation also.

The cost of outbondlogistic is also increase due to increase in the petrol price.

Profit before depreciation, interest and tax is reduced by 1.8 % because HUL’s operating expenses is increased by 13.75%, due to inflation in that year the cost of raw material is increased and the company was not be able to increase its selling price due to tough competition, as it is mentioned in the annual report of the company.

As the depreciation is increased by 20%, profit before interest and tax is reduced by 3.4%.

Profit before tax is increased by .80% as there interest income is increased by 78.35% due to good investment policy adopted by the company.

The net profit of the company is increased by 4.7% due to increase in the exceptional / extraordinary items by 53.7%.

As mentioned in the annual report of the company “Raw materials constitute a big chunk (around 60%) of input cost for FMCG sector companies. For HUL- Palm Oil and Chemicals contribute 59% of total raw material cost.” Due to inflation the increase in the cost of raw material affects a lot towards the cost of manufacturing which leads to decrease in the gross profit of the company.

SEGMENT-WISE SALES PERCENTAGE

YEAR-2010-2011

16

46

32

20 2

Soaps, Detergents & Household Care

Personal Products

Foods

Others

Major portion of Hindustan unilever limited’s income is contributed by soaps,detergents and household care sector i.e 46%, then personal products sector i.e32%,then food sector i.e 20% and other is just 2%.

There was strong volume growth in the Soaps and Detergents category, value grew by 6.1% due to price corrections taken in laundry business in the early part of 2010.Personal Products category grew by 15.7% during the year.

Comparative Balance Sheet of Hindustan Unilever Limited

PARTICULARS 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011

Fixed assets 1511.01 1708.14 1663.072 2436.07 2468.24

Investments 2413.93 1440.8 266.096 1264.08 1260.68

Net deferred tax 224.55 212.39 203.864 248.82 209.66

Net current assets -1353.4 -1833.57 -146.272 -1365.43 -1304.66

TOTAL ASSETS 2796.09 1527.76 1986.76 2583.52 2633.92

Share capital 220.68 217.74 174.392 218.17 215.95

Reserves and surplus 2502.81 1221.49 1474.816 2365.35 2417.97

Loan fund 72.6 88.53 337.552

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TOTAL LIABILITIES 2796.09 1527.76 1986.76 2583.52 2633.92 (source – HUL annual report 2010-2011)

Ratio analysis of the company

RATIO 2008-2009 2009-2010 2010-2011

CURRENT RATIO 0.73 0.84 0.86

QUICK RATIO 0.4 0.46 0.43

INVENTORY TURNOVER RATIO 7.4 8.99 7.91

DEBTOR TURNOVER RATIO 33.46 29.24 24.28

EXPENSES (% OF TOTAL SALES) 7.57 7.31 7.25

GROSS PROFIT MARGIN 10.8 14.7 12.41

NET PROFIT MARGIN 9.67 12.29 11.56

RETURN ON CAPITAL EMPLOYED 94.87 106.78 102.47

(Source-www.moneycontrol.com)

Current ratio and Quick ratio shows the short term financial position of the company. An ideal current ratio should be 2:1 and an ideal Quick ratio should 1:1. The company may get difficulty in paying of its current liabilities

Since Hindustan unilever limited is such a huge company and having a good market repo, it does not get any problem in dealing in credit basis. It can easily raise funds from the market in order to perform its activities..

The inventory of the company is also increased by 631.33 cr.

Inventory turnover ratio is increased from 7.4 to 7.91 this shows that stock of HUL is efficiently used. This ratio indicates the number of times the stock is turned into sales during the year.

The higher the ratio the better it is. HUL’s stock is selling quickly, it is repeated 7 times during the year, and this is all due to good marketing strategies opted by the company like SHAKTI AMMA. Their direct retail coverage in rural areas was increased by 6,00,000 outlets.

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But as compared to previous year there is decrease of approximately 15% in the turnover ratio.

Company’s debtor turnover ratio is reduced to 24.28 from 33.46. The higher the ratio the better it is as it indicates the amount from debtor is being collected more quickly.

The more quickly the debtor pay the less risk from bad debts and so the lower the expenses of collection there is an increase in the liquidity of the company.

This ratio is decrease due to increase in the credit sales of the products also the sales policy of the company was good in 08-09.

Expenses as a percentage of total sales are approximately 7%. As the total sales of the company is increasing these expenses is also increasing in the same trend.

The gross profit margin of the company is increasing as compared to 08-09 but tie rate is slow and in 10-11 it is decreased by approximately 2% it is due to the increase in the price of raw material and the selling price is not gone –up in proportion to the increase in cost.

Gross profit margin has been decrease from 14.70 to 12.41%, so there is decrease in margin of 2.29%.Since the price of the raw material, freight etc is increased but the sale is not increased in that proportion so there is decrease in the gross profit margin.

Company’s return on capital employed is increased from 94.87 to 102.47. This ratio is the barometer of the overall performance of the enterprise. The capital employed by the company is efficiently used.

EXTERNAL COMPARATIVE ANALYSIS OF HINDUSTAN UNILEVER LIMITED

Name of competitors.

Current ratio. Gross profit margin ratio.

Net profit margin ratio.

Inventory turnover ratio.

09 10 11 09 10 11 09 10 11 09 10 11

HUL

PROCTER and GAMBLE

.73

1.94

.84

2.30

.86

2.13

10.8

25.86

14.7

25.89

12.41

22.85

9.67

19.89

12.29

22.36

11.56

19.31

7.4

16.88

8.99

17.79

7.91

21.28

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MARICO

1.28 1.35 .99 13.3 15.37 13.44 7.35 11.65 13.29 8.22 6.36 5.98

(SOURCE- www.moneycontrol.com)

Name of company Market capital Sales turnover Net profit

HUL 72,154.44 19401.11 2,305.97

PROCTER and GAMBLE 6,251.94 1000.25 150.88

MARICO 9,228.9 2,346.87 315.32

(SOURCE- www.moneycontrol.com)

ANALYSIS

It can be easily observed from the above data that HUL has the major market capitalization among its competitors. It’s close competitor are far away in terms of market capitalization. It has issued a large number of shares in the market as compared to other competitors..

HUL faces a tough competition from P&G India in its key segments i.e. Detergents and Personal Care.

Head & shoulder, Pantene, Tide, Ariel are some of the products of P&G which are in great competition with Hindustan unilever limited product like Rin, surf excel, Dove etc.

HUL is one of the largest Fmcg company whose products are served in all market segments that’s why the sales of HUL is largest among the individuals.

On analyzing the ratios of hul and it’s competitors, P and G is having highest net profit margin. It means that PandG is earning more on selling a single unit as compared to HUL and MARICO.

Hindustan unilever limited believes in more and more selling. It’s earning per unit is low as compared to MARICO and Pand G both.

It can be observed that P and G is having very less current liability as compared to its current assets, but in case of HUL it is not so.

As compared to Hindustan unilever limited and Marico, P and G is incurring more indirect expenses in its business.

The stock of PandG is more efficiently used as compared to Hindustan unilever limited and Marico, as the inventory turnover ratio of PandG is much high as compared to Marico and HUL.

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Talking about the sales turnover Hindustan uniliver limited has the highest sales among it’s competitors.it is all due to huge direct retail coverage, good sales and marketing strategies.

SOURCE OF INFORMATION:

COMPARATIVE PROFIT AND LOSS ACCOUNT - www.hul.co.in

SEGMENT-WISE SALES PERCENTAGE – HUL ANNUAL REPORT- 2010-2011.

COMPARATIVE BALANCE SHEET - HUL ANNUAL REPORT- 2010-2011.

COMPARATIVE RATIO ANALYSIS - www.moneycontrol.com

COMPARATIVE ANALYSIS WITH COMPETITORS - www.moneycontrol.com

Company Dimension:

Organizational Structure: The Company is the subsidiary of Anglo-Dutch Company Unilever. The parent company (Unilever) holds 52% stake in H.U.L. They have the total decision making authority. The remaining

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share is with the Indian counter-part. The Company follows the matrix structure of the organizational chart in Indi

.As the company is very old so the company’s organizational structure is very well placed and the company has produced many successful business managers. The organization is divided in four different functions. Each headed by a functional head. All these functional heads report to the chairman. The Board of Directors appoints the chairman and the C.E.O. Mr. Harish Manwani and Mr. Nitin Paranjpe are the Chairman and C.E.O of the company respectively. The company has non-executive Directors, Executive Directors as well as management committees which look into different operations. The different functions report to the vertical head as well as co-ordinate at the horizontal level.

The Board of Directors comprises of nine persons.

Mr. Harish ManwaniChairman2. Mr. Nitin ParanjpeManaging Director andChief Executive Officer3. Mr. Sridhar RamamurthyExecutive Director, Finance & ITand Chief Financial Officer4. Mr. D. S. ParekhIndependent Director5. Mr. A. NarayanIndependent Director

Executive Director

(Supply Chain)

Executive Director

(Personal Care)

C.E.OC.F.O

Chairman

Board of Directors

InorganicOrganic

Company’s Growth

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6. Mr. S. RamadoraiIndependent Director7. Dr. R. A. MashelkarIndependent Director8. Mr. Gopal VittalExecutive Director,Home & Personal Care9. Mr. Pradeep Banerjee Executive Director, Supply Chain6 The external auditors for the company are M/s. Lovelock & Lewes and Mr. Dev Bajpai is the company secretary.

Organic: The Company grew organically through its own expansion and new launches. The size of the market increased and new products were introduced in the market. The company launched new products in various categories and this helped the company to grow its market. Company maintained its growth rate in double-digit. New products which were launched also captured the market very well. It went up from Rs.14,715.10 cr in 2007 to Rs.20,305.54. Most of the segments saw good increase in their sales. There was 13% volume growth overall. The business saw growth across all segments. The Home and Personal Care business grew by 9.8 per cent with competitive growth in both Laundry and Personal Wash. Personal Products business grew strongly at 15.7 per cent. Growth was broad based across categories with Skin Care delivering a particularly strong performance. The Foods business grew 13.4 per cent. Red Label tea was re-launched and continued to deliver double-digit growth. Water purifier brand, Pureit, grew strongly and continued to expand its franchise with product offerings across multiple price points. Pureit now protects 4.5 million homes. The company did not have any joint ventures with any other firm but plans to open so in the near future as the competition is increasing with more players coming in the market.

Inorganic: The Company did not have any merger or acquisition in previous 3-4 years. One major incident happened in 2007 when the parent Unilever company acquired the majority stake (52%) and the name of company was changed to Hindustan Unilever Limited.

Initiative on Research & Development: The Company has two research and development centres in India. The company focuses on sustainable growth. The company spends a good amount of its money in research & development. The company focuses on saving water as it will be scarce in quantity till 2030. As India is focusing on preserving water for future as water will become scarce, in sync with India the company is working on developing detergents which uses less water so that water can be saved as a lot of water is wasted in washing clothes. Similarly, In 2010 the company launched its water purifier (Pureit) which runs on battery (first time in India) as there is frequent power cut in India and acquired number one position in the market. The company also spends a lot of money so that it can develop better personnel and oral care products as the competition is increasing in this segment with many entrants although its products have highest market share in the market. In Rexona deodorants a special molecule has been formed which kicks in

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stressful conditions as claimed by the company. Similarly company is also working on tooth brushes and company is soon going to launch new tooth brushes.

The company also focuses on reducing plastics used for packaging of its different products and in doing so they reduced plastics by 18% it in their deodorants and are continuously trying to reduce use of plastics.

In Food & Beverages company is focussing on products which are good to health and are good in taste. It launched its tea brand Red Label with added vitamins which are helpful for good health. The company is also working on new ice-cream formula which will have better taste and will contain low fat n high amount of fruits.

Initiative on Product & Market Development:

1. Market Penetration: The Company grew through this matrix a lot. The Company increased its market penetration with the help of project Shakti in rural areas. Company added 6,00,000 outlets in rural areas that tripled its reach in rural market. Company made rural women self-dependent as they use to sell the company’s product in the designated area. This project also helped in creating employment at the lower level. Life of many women and families changed through this project. Further Shakti-Maan was also launched after project Shakti Amma became hit. It helped the company to exploit the uncaptured market of the village. Around 23,000 Shaktimaans and 60,000 Shakti amma work under this project in different villages. This project helped the company to grow at a very healthy rate. This also became part of their corporate social responsibility. The company also increased its presence by increasing the number of dealers. The company initiated its scheme that its product should be sold at every store. The company made a specialised and dedicated sales team for top skin and cosmetic care which already existed in different product lines.

The company also devised new tool for distributors which analyses the performances and reward them accordingly. Thus, motivating dealers to perform better. Company also focussed on- shelf availability backed by extensive merchandising and visibility. These made the company supplier of the year in 2010 by many retailers. The company also focused on reducing inventory and delivering fresh products. The company follows TPM in the supply-chain department so that any damage is prevented.

The company re-launched many of its existing brands with new packaging and design. Rin, LifeBuoy, Wheel were re-launched. As the figures show that this project” Shakti-Amma” played a very vital role in maintaining the double digit growth of the company.

2. Market development: The Company did not serve any new market. It served the same old market.

3. Product development: New products were launched in these years but older ones also stayed in the market. New products like Cif, Fair & Lovely eraser pen, Pond’s Gold Radiance range were introduced. In food business Kissan Nutrismart were launched. Company has got a very vast distribution network so they are able to

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make the product available easily through their distributors. The Company also launched Kissan soya n Kissan spread in sauce and spread respectively. The company also plans to open Bru wold cafe on a pilot basis. The company’s brand Knorr tried to make a “soup time” among kids and also entered in the noodles market with Knorr soupy noodles. The company launched new flavours in ice-creams through its brand Kwality which won many awards. The Company always come up with its new innovations in its products which are better and easy to use. Company also launched many different variants of bread through its brand Modern Bread.

4. Diversification: Although the company launches it products in the same line. It launched Purit water purifier which was different from its previous launches. It was a horizontal diversification as it was focused on the same set of customers who already use the company’s product. Pureit when launched captured the market and became leader in its category. Pureit worked on a simple formula of giving boiled water. Later on looking at the success, different variants of Pureit were launched.

Initiatives on Corporate Social Responsibilities: Company has been actively performing corporate social responsibility for long. Their schemes have been high point and earned them a good-will in the market. Keeping an eye on water scarcity in the future both for consumption and for drinking Purposes Company looks to store water in its surrounding areas and also consume less water.

Greening Barriers:

 Water Conservation and Harvesting:

HUL's Water Conservation and Harvesting project has two major objectives:

To reduce water consumption in its own operations and regenerate sub-soil water tables at its own sites through the principles of 5R - Reduce, Reuse, Recycle, Recover and Renew; Company has launched detergents which clean clothes with lesser water.(Surf Excel Quick Wash)

Help adjacent villages to implement appropriate models of watershed development. 

Project Puducherry  

In 2008-09, HUL's Puducherry unit partnered with DHAN Foundation, Madurai and identified eight village ponds for renovation to enhance the water availability. One of the unique aspects of the project was to form social capital by organizing villagers into pond association and empower them to execute the physical renovation work. The pilot project has improved water availability in eight village ponds by harvesting monsoon run-off. Rainwater harvesting storage of 22300 cu. meter has fulfilled the multiple domestic needs of 4519 households in eight hamlets and 346 acres are now irrigated due to the rejuvenation of ground water.

SHAKTI - Changing Lives in Rural India Shakti is HUL's rural initiative, which targets small villages with population of less than 2000 people or less. It seeks to empower underprivileged rural women by providing income-generating opportunities, health and hygiene education through the Shakti Vani programme, and creating access to relevant information through the iShakti community portal. In general, rural women in India are underprivileged and need a sustainable source of income. NGOs, governmental bodies and other institutions have been working to improve the status of rural women. Shakti is a pioneering effort in creating livelihoods for rural women, organised in Self-Help Groups (SHGs), and improving living standards in rural India. Shakti provides critically needed additional income to these women and their families, by equipping and training them to become an extended arm of the company's operation.  

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Health & Hygiene Education Lifebuoy Swastya Chetna (LBSC) is a rural health and hygiene initiative. LBSC was initiated in media dark villages (in UP, MP, Bihar, West Bengal, Maharashtra, Orissa) with the objective of spreading awareness about the importance of washing hands with soap.  The need for a program of this nature arose from the fact that diarrhoeal diseases are a major cause of death in the world today. It is estimated that diarrhoea claims the life of a child every 10 seconds and one third of these deaths are in India. According to a study done by the London School of Hygiene and Tropical Medicine, the simple practice of washing hands with soap and water can reduce diarrhoea by as much as 47%. However, ignorance of such basic hygiene practices leads to high mortality rates in rural India.

Economic Empowerment of Women  The Fair & Lovely Foundation is HUL's initiative which aims at economic empowerment of women across India. It aims to achieve this through providing information, resources, inputs and support in the areas of education, career and enterprise. It specifically targets women from low-income groups in rural as well as urban India. Fair & Lovely, as a brand, stands on the economic empowerment platform and the Foundation is an extension of this promise. The Foundation has renowned Indian women, from various walks of life, as its advisors. Among them are educationists, NGO activists, physicians. The Foundation is implementing its activities in association with state governments.  Market Standing:

Event 2008-09 2009-10 2010-11Opening price 217.50 253.50 305.00Highest price 267.00 288.50 395.80Lowest price 170.00 228.05 268.00Closing price 253.50 265.00 393.91

2008-09: We can see that in 2008 the share price went down due to global recession. The opening price Rs 217.50 is of 01st April 2008. During the whole year the highest price per share went up to Rs 267.00. The demand went down and there was an industry slowdown. The Company stabilized itself well and still was in profit when its sales went down. 2009-10: In the next year the market started recovering and the share prices as a result went up. We can see that the opening price at the start of the year was Rs. 253.50 and year’s high was at Rs 288.50.Company increased its sales and was in profit. The market value of the financial year also increased. The company launched its products like Cif which also captured the market.

20010-11: The markets went to being normal and the sales as well as the share prices also went up. It also went up due to launch of new products by the company. The Company re-launched its brands like Rin, Lifebuoy. Rin again became leader in its category.

SOURCE OF INFORMATION www.hul.co.in www.hul.co.in/innovation/ www.moneycontrol.com www.economictimes.com

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www.irish.com

Future Direction OF HUL

HUL plans to launch global margarine brand in India

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Company plans to launch global margarine brand in India. The initiative is a part of companies plan to strengthen their presence in food portfolio. The company will also launch other food item after this big launch. Margarine is also 25%-30% cheaper than butter. The Company is currently working on setting up distribution network across all its retailers as it will require different facilities such as cold chain. The company will also have to facilitate its retailers with appropriate cold storage machines and transportation facilities.

The company will have to fight with AMUL’s LITE which is present in the market for last twenty years. AS the company’s CEO in a recent interview said that there has been a change in the market with rise in income of people, more working women, younger population willing to experiment, fight for time in urban India and increased global awareness towards health and packaged food items. More organized distribution system and cold stores will help the company to sell its product.

Company is also entering into Bakery products along with future group, where they will sell bakery products in Big Bazar and name of both the companies will be there on the products. It will be sold with the brand name Modern. The Company will make it of their own and will sell through Big Bazar outlets only. In this they will get the wide selling networks of Big Bazar and the product can also be kept safely in the store so the extra cost for HUL will down in transportation.

Initially the project will be started in selected cities and then it will be expanded in many cities.

The Company also plans to enter into organized retails and want to increase its share in the total revenue by 20% -25% which is currently 6-7%.

On 16-05-2011 company launched “India water body” which focuses on developing those products which consume less water so that more water can be saved. As the company states that by 2030 there will be a huge water scarcity in India. Company is focusing on those products which will consume lesser water. Surf Excel quick wash was a move in this direction.

The Company is planning to enter high end of personnel care goods.as the demand has increased with rise in income of the consumer and with more working women, the demand will increase in the near future The Company plans to introduce complete range of personnel products with a new brand name.

HUL may not have a smooth sailing as the dairy segment is already too crowded. “There are lot of regional as well as national players operating in this segment. Some such as Amul (Anand Milk Union Ltd), Nestle India Ltd and Britannia Industries Ltd are well penetrated. It will not be easy to crack into this category,” said Sameer Deshmukh, an analyst with Mumbai-based brokerage.

Even rivals such as Amul say the new product will have to compete with well-entrenched brands to establish itself. “Our margarine brand Amul Lite has been present in the market for the past 20 years,” said Sodhi “It was launched around the same time when HUL brought Blue Band to India. While Blue Band was withdrawn, we have stood the ground all this while and will continue to do so.”

According to market research firm AC Nielsen, the butter and margarine market is currently estimated at Rs688 crores.

HUL and Bharti Retail partner to promote consumer awareness on plastic Recycling.

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This programme launched jointly by Hindustan Unilever Limited and Bharti Retail is called “Go Recycle.” It will run for three months in all the 31 easyday and easyday Market stores across National Capital Region (NCR). This is a first-of-its kind initiative in India and is targeted to help reduce packaging waste and also inform and educate consumers to practice responsible consumption.

The “Go Recycle” programme will be promoted to consumers through in-store displays, leaflets and mailers. The programme aims to drive consumer participation through a consumer incentive scheme. Consumers who bring empty plastic bottles and pouches of any brands in five FMCG categories (tea pouches, detergent powder pouches, shampoo & conditioner bottles, tooth paste tubes and ketchup pouches & pet packs) will be awarded discount coupons at the ‘easyday’ and ‘easyday Market’ stores in NCR. The coupons can be redeemed at these stores to buy any products of the five leading Hindustan Unilever brands, namely Surf, Kissan, Dove, Red Label and Closeup.This initiative builds on the Unilever Sustainable Living Plan. Hindustan Unilever Limited is a subsidiary of Unilever. The Sustainable Living Plan aims to help everyone enjoy a good quality of life while respecting the planet. The Unilever Sustainable Living Plan decouples business growth from environmental impact. It sets out over 50 social, economic and environmental targets. The Unilever Sustainable Living Plan has set three big goals for Unilever to achieve by 2020:

Help more than one billion people improve their health and well-being Help the environmental impact of our products Source 100% of our agricultural raw materials sustainably

Nitin Paranjpe, CEO, Hindustan Unilever Limited, said, “One of our key endeavors as part of the Unilever Sustainable Living Plan is to motivate consumers to take the small achievable actions that add up to a big difference and enable us all to live more sustainably. With over 700 million consumers across India using our products we believe that such small actions by our consumers will result in a big difference to promote sustainable living. It will ensure that while consumers have the opportunity to improve their quality of lives through use of our products it will also reduce the environmental impact of this consumption.”