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Tag: Rural market

  • Resilient rural market drives HUL’s growth in Q1, net profit rises to Rs 2,100 cr

    Resilient rural market drives HUL’s growth in Q1, net profit rises to Rs 2,100 cr

    New Delhi: A resilient rural market, coupled with subsequent decline in Covid cases has infused growth in theFMCG major Hindustan Unilever Ltd (HUL) this quarter. The company reported a 10.7 per cent increase in its consolidated net profit for Q1 ended June, 2021.

    The FMCG major posted a net profit of Rs 2,100 crore in Q1 2021, compared to Rs 1,897 crore recorded in the April-June quarter of the previous fiscal. Net sales during the quarter under review stood at Rs 11,996 crore, up 13.49 per cent, as against Rs 10,570 crore in the corresponding period a year ago.

    HUL’s total expenses were at Rs 9,546 crore in the quarter under review, up 14.68 per cent from Rs 8,324 crore a year ago. The FMCG major delivered a strong performance with domestic consumer growth of 12 per cent, underlying volume growth of 9 per cent and profit after tax growth of 10 per cent, said the company in a statement.

    “In a challenging environment, we have delivered a strong performance across topline and bottomline. Our performance in the quarter has been resilient and is reflective of our capabilities, the agility in our operations and the intrinsic strength of our portfolio, “said HUL CMD Sanjiv Mehta.

    The number of Covid cases have come down June onwards, paving the way for FMCG industry’s growth and market levels to reach close to March 2021 levels. “The rebound that we have seen in the month of June and early July is led by rural. So, the good news is that rural is resilient, and it has started to come back, strongly ahead of urban,” HUL CFO Ritesh Tiwari while talking to the media virtually post Q1 results. “Rural has been a good engine for FMCG for the last few quarters, and it continues to be resilient. Hopefully, we see a good monsoon and this will augur well for the rural economy.”

    The company witnessed double-digit growth across all three divisions — Home Care, Beauty & Personal Care and Foods & Refreshment.

    Household care continued to perform well growing in high double-digits on a strong base. Liquids and Fabric Sensations also benefited from robust market development initiatives. HUL’s revenue from the home-care segment was up 11.94 per cent this quarter to Rs 3,797 crore, as against Rs 3,392 crore in the corresponding quarter in 2020.

    The company’s revenue from Beauty & Personal Care was up 13.41 per cent to Rs 4,585 crore, as against Rs 4,043 crore of the corresponding quarter. This was led by Hair Care and Skin Care, both growing in high double-digits, said HUL. “Contextual communications in Hair Care continue to yield good results. Skin Cleansing continued its strong momentum, soaps grew on a high base and the premium segment performed well. Hand Hygiene portfolio declined against an exceptionally high base,” it said in a statement.

    The Food & Refreshment segment was up 12.2 per cent to Rs 3,319 crore, as against Rs 2,958 crore in the corresponding period, helped by double-digit growth in segments as tea, ketchups, soups and nutrition business. According to HUL, all Tea brands also continued to grow in high double-digits despite a very strong base in the prior year.

    HUL said it is cautiously optimistic about future demand recovery.

  • Guest column: Is FTA ready for format shows?

    Guest column: Is FTA ready for format shows?

    MUMBAI: FTA Channels in the prequel era, before they left the space, had for the first time opened up a world of eyeballs and revenue that was being under-served and built successful revenues and business models. Since content was free and was already monetized and exposed on the pay channels catering to urban eyeballs for all the main players. However, while the business was lucrative and it added hundreds of crores worth in revenue to all the players in the FTA platform. Even the weakest player pulled in almost 100crs worth of advertising revenue with a relatively low cost of operation to air/run these channels. But the revenues weren’t negligible. In fact, a few channels almost matched big urban pay Hindi movie channel revenues. That was the kind of weight that FTA channels were punching with.

    Even at that time, over 170+ clients were buying these eyeballs & markets. These were mainly led by the FMCGs. The GRP pie was 500+ amongst the top six players in GEC FTA space and the trading levels were very low, as the mystical CPRP was designed for the urban & pay channel trading. A few players of the market got smart and made it U+R base, purely for negotiations and better rates. But no one was willing to unlock or set a benchmark for the rural group as GRPs on Rural base were available in 100s and more. So, the FTA pricing then became a Sell that had very little buy in from both sides of the table. But still, the revenue pie was over Rs. 1200 crores two to three years ago.

    Today, all players are back. The GRP pie is again back to its glory of 500 + and the clientele is also back to in excess of 160+ advertisers. This time we have new categories of clients that include education, gaming, etc but FMCG still leads the pack. But as most old clients have matured in the urban market, they are looking for newer markets to grow in. The brightest minds speaking and predicting about the recovery of the economic growth are pointing towards “Rural first”. All this is giving the FTA channels a massive advantage as these markets had to depend on print/outdoor/radio and cinema and got very little support for TV. That has now changed. The revenue pie too has recovered the fastest for FTA and has grown despite the challenges that the other categories of channels are facing in terms of ad bucks.

    Learnings from then and now: Will the Twain meet?

    The trading levels are designed for urban pay channels to take lion’s share of the revenue pie. Investments for pay channels are of course significantly more or rather better read as that investment in FTA Hindi GEC is significantly low. Most FTA channels have a larger interest as they have pay and urban centric channels as a group. So, it’s a catch-22 on how to work the true value of the seemingly presented poorer family member. If the business plan is to be looked with the lens of ‘Since content is free, all the value generated is profit’ then this space will languish instead of flourishing.

    Is FTA ready for format shows? Is FTA ready for original shows with U+R or rural taste in programming? Are education and sports (non-cricket) ready to build successful revenue models on this platform? Can made for FTA movies be produced at budgets that can be supported by these channels? In spite of having the world’s leading badminton players, we struggle to build a revenue model around it. Wresting too has arguably been a great opportunity missed.

    All in all, can FTA be priced  aptly and fairly for the audiences it delivers and the markets that it reaches? Can FCT that was free commercial time but was always paid for be applicable to FTA as it’s called free to air?  Interesting times await…

    (The author is COO, Enterr10 Television. Indiantelevision.com may not subscribe to his views.)