Hul

A
PROJECT REPORT
ON
“PERFORMANCE ANALYSIS OF HINDUSTAN UNILEVER LIMITED”
FOR
HINDUSTAN UNILEVER LIMITED
SUBMITTED TO
SAVITRIBAI PHULE PUNE UNIVERSITY
IN PARTIAL FULLFILMENT OF TWO YEARS FULL TIME
MASTERS DEGREE IN BUSINESS ADMINISTRATION (MBA)
SUBMITTED BY
SHUBHAM DESHMUKH
(BATCH – 2021-23)
GUIDED BY
PROF._______________
JSPM’s
JAYAWANTRAO SAWANT COLLEGE OF ENGINEERING
MBA DEPARTMENT
HADAPSAR, PUNE- 411028
COLLEGE CERTIFICATE:
COMPANY CERTIFICATE:
ACKNOWLEDGEMENT
It is my privilege to express gratitude & sincere thanks to JSPM’s Jayawantrao Sawant

College of Engineering, MBA Department, Hadapsar, Pune for giving me an opportunity to
undertake the summer internship project report on the topic “Performance Analysis Of
Hindustan Unilever Limited.”
I express sincere thanks to my project guide, Mr./Dr./Ms./Mrs. …, (Designation)…………..

(Department), for guiding from the inception till the successful completion of the project.
I sincerely acknowledge him/her for extending his/her valuable guidance, support for
literature, critical reviews of projects & researches and above all the moral support he/she
provided to me at all stages of this project.
(Signature of Student)
Shubham Deshmukh
MBA (Batch 2021-2023)
DECLARATION
I, Shubham Deshmukh, studying in the second year of Master of Business Administration

(MBA) at Jayawantrao Sawant College of Engineering (MBA Department), Hadapsar,
Pune, hereby declare that I have completed the Summer Internship Project titled
“Performance Analysis Of Hindustan Unilever Limited” as a part of the course
requirements for Master of Business Administration (MBA) Program.
I also declare that the work undertaken by me is original and has not been copied from any
other source. I further declare that the information presented in this project is true and
original and has not been submitted to JSCOE or any other Institute for any other
examination, before this. It is based on the original research work and will be used only for
the academic purpose. It will not be produced in any condition as a source of information to
an industry.
Date: Signature
Place: Shubham Deshmukh
MBA (Batch 2021-
2023)
EXECUTIVE SUMMARY:
Chapter 1:
Chapter 1 is about Introduction on Performance Analysis.
Chapter 2:
Chapter 2 is about Research objectives & Scope of the study.
Chapter 3:
This chapters contains information about overview of the FMCG Industry includes, What
are FMCGs, The nature of FMCG, Growth drivers for Indian FMCG Industry,SWOT
Analysis, Top 10 FMCG Industry Trends,competitive landscape of FMCG,Top FMCG
Companies, etc. And also contains information about overview of Hindustan Unilever
Limited includes, Introduction, SWOT Analysis, Brands and Products,etc.
Chapter 4:
In this research project chapter 4 contains information about the review of literature. This
chapter is various past research of well-known researchers is included which gives and
frame work for project report.
Chapter 5:
Chapter 5 is about Research Methodology includes, Research objectives, Scope of the
study, Research Design, Research Instruments, Data Collection Method, etc.
Chapter 6:
This chapter is all about Data Analysis and Interpretation. I have done some financial ratios
to analyse the performance analysis of Hindustan Unilever Limited includes, Profitability
Ratio, Turnover Ratio, Liquidity Ratio and Leverage Ratio. I have also done Horizontal
Analysis, Trend Analysis and Vertical Analysis.
Chapter 7, 8 & 9:
The Findings, Suggestions and Limitation of the study are presented in chapter 7, 8 & 9.
Chapter 10 & 11:

Chapter 10 & 11 presents the overall project's conclusion, bibliography, and annexure.
INDEX:
Chapter Particulars Page No.
Chapter 1 Introduction
Chapter 2 Objectives & Scope of the project
Chapter 3 3.1 Sector Profile
3.2 Company Profile
3.3 Product Profile
Chapter 4 Theoretical Background
Chapter 5 Research Methodology
Chapter 6 Data Analysis & Interpretation
Chapter 7 Findings
Chapter 8 Recommendations / Suggestions
Chapter 9 Limitations of the project
Chapter 10 Conclusion
Chapter 11 Bibliography
Annexure
Chapter 1
INTRODUCTION
Performance analysis is the technique of studying or comparing the performance of a
specific situation in contrast to the aim and yet executed. In Human Resource, performance
analysis can help to review an employee’s contribution towards a project or assignment,
which they allotted him or her.
Importance of Performance Analysis

Importance-performance analysis (IPA) is an accepted method for measuring service quality
well known for its simplicity and stress-free application. Thus, IPA focuses on the gap
between the customer expectation on the importance and judgment on performing specific
attribute of service consumed.
We distinguish three basic steps in the performance analysis process: data collection, data
transformation, and data visualization. Data collection is the process by which we get data
about program performance from an executing program. Data collected in a file, either
during or after execution, although in these situations it is presented to the user in real time.
We can distinguish three basic data collection techniques:
DATA COLLECTION
Profiles: It records the time spent in different parts of a program. This information, though
minimal, is often invaluable for highlighting performance problems. Profiles are gathered
automatically.
Counters: It records either frequencies of events or cumulative times. The insertion of

counters may require programmer intervention.
Event: It records each occurrence of various specified events, thus producing large numbers
of data. It produces traces either automatically or with programmer intervention.
DATA TRNSFORMATON
· The raw data produced by profiles, counters, or traces are in the form required to answer
performance questions.
· Data transformations are applied, often with the goal of reducing total data volume.
· It can use transformations to find mean values or other higher-order statistics or to extract
profile and counter data from traces.
DATA VISUALIZATION
· Although data reduction techniques are used in some situations to compress performance
data to scalar values.
· This process can help from the data visualization techniques. It can apply both conventional
and more specialized display techniques to performance data.
· Each of the various performance tools described in later sections incorporates a set of built-
in transformations; the programmer can code transformation that is more specialized.
A trace is processed to produce a histogram giving a distribution of message sizes. Parallel

performance data are multidimensional, comprising execution times, communication costs,
and so on, for multiple program components, on different processors, and for different
problem sizes., often necessary to explore the raw multidimensional data well known in
computational science and engineering,
As we shall see, a wide variety of data collection, transformation, and visualization tools are
available. When selecting a tool for a particular task, we should consider the following
issues:
1. Accuracy. Performance data obtained using sampling techniques are less correct than
data obtained by using counters or timers. With timers, one must take the accuracy of
the clock into account.
2. Simplicity. The best tools in many circumstances are those that collect data
automatically, with little or no programmer intervention, and that give convenient
analysis capabilities.
3. Flexibility. It extends a flexible tool to collect more performance data or to offer
different views of the same data. Flexibility and simplicity are often opposing
requirements.
4. Intrusiveness. Unless a computer provides hardware support, performance data
collection introduces overhead. We need to know of this overhead and account for it
when analysing data.
5. Abstraction. A good performance tool allows it to examine data at a level of abstraction
proper for the programming model of the parallel program. For example, when
analysing an execution trace from a message-passing program, we wish to see
individual messages, if someone can relate them to send and receive statements in the
source program. However, this presentation is not right when studying a data-parallel
program, even if the compilation generates a message-passing program. Instead, we see
communication costs related to data-parallel program statements.
Chapter 2
OBJECTIVES & SCOPE OF THE PROJECT:
2.1 Research Objectives:

• To determine profitability, liquidity, economic status position of the HUL.
• To evaluate the competence capacity of HUL.
• Recommendations based on findings.
• Shows insight of the company’s performance.
• To determine market share and market position of the company.
2.2 Scope of the study:
• This study of “Financial Performance Analysis of Hindustan Unilever Limited” is

important because just making a profit is not enough, the business needs to earn enough to
cover its capital costs and create more revenue to grow. So to get more profit made
important.
• This study provides internal and external stakeholders with the opportunity to make
informed investment decisions.
• The study aims to analyse the liquidity, profitability, solvency of the factory and the
efficiency that transforms its resources into a service.
• It helps to improve the knowledge of business analysts and investors in various
companies.
Chapter 3
3.1 Sector/Industry Profile
3.1.1 What are FMCGs?

The fastest consumer goods sector (FMCG) is the 4th largest sector in the Indian economy.
It is characterized by high profitability of consumer goods packaged, i.e., manufactured,
distributed, marketed and short-term goods. FMCG products that dominate the market today
are cleaning products, toiletries, toothpaste products, cosmetics, etc. The FMCG industry in
India includes pharmaceuticals, consumer electronics, cold drinks packed with food
products and chocolates. As the industry integrates a variety of products, different
companies dominate the market in the various sub-sectors. However, some of the top
FMCG companies in India are Dabur (60%), Colgate (54.7%) and Hindustan Unilever
(54%). FMCG is a summary of fast-moving consumer goods, these products are part of our
daily lives as we see and use them regularly such as; beverages, cleaning products, clothing,
consumer goods, OTC medicines etc. these goods are bought and consumed quickly due to
high demand and low price. The jeans you bought at Levi's store, the coke you drank at the
store, or the hand sanitizer you rubbed before eating your food, you get the perfect
impression! All of this is part of a fast-moving consumer goods market.
3.1.2 The Nature of FMCG are as follows:

Low Price
Low Involvement of Buyers
Repeated Purchase
Large Quantities
Easily Available
High Stock Turnover
3.1.3 Growth Drivers for Indian FMCG Industry:
1. Favourable Government Initiatives & Policy:

• The Government of India has allowed 100% FDI in single brand retail and 51% in multi-
brand retail.
• In order to strengthen India's manufacturing capacity, the government has identified the
FMCG sector under the PLI (Production Linked Incentive) scheme.
• The Government of India has introduced a new Consumer Protection Act to ensure
affordable, simple, speedy and timely delivery of justice to customers.
• The Goods and Services Tax (GST) introduced by the government has reduced tax rates
on some oral and personal care products from 23-24% to 18%.
2. Rural Consumption:
65% of India's population lives in rural areas. Over the years, FMCG consumption in these
areas has increased due to rising income levels and demand for branded products.
According to estimates, rural households contribute around 36% to 37% of the country's
total FMCG sales.
3. Branded Products:
Rising wages and changes in consumer lifestyles have accelerated the trend towards
premiumization in the country. Consumers are well informed about products and are willing
to pay more for branded items that suit their lifestyle and social status.
4. Young Population:
India has an amazing youth population compared to other developing countries. The
majority of the workforce in India is this young population and this group of people will be
the main growth driver, especially for the packaged food category, as they hardly have time
to cook.
5. Growth of E-Commerce Platforms:

E-commerce has completely changed the way consumers buy goods. FMCG companies use
e-commerce platforms as a way to test their new product innovation and new concept to
reach a larger audience. As e-commerce provides the convenience of ordering products
using a mobile device or computer, consumer preferences for online shopping are growing.
3.1.4 Top 10 FMCG Industry Trends:
1. Sustainability:
Consumers are increasingly aware of climate change and its impact on the environment.
They thus pay more attention to the social activities of companies and look for those that
offer a more responsible selection of products. As sustainability comes to the fore, FMCG
companies are addressing not only how they present and package their products, but also
what materials they use in their products. To meet consumer demand, more and more
FMCG companies are offering compostable, recyclable and reusable packaging. In addition,
crueltyfree vegan ingredients are on the rise not only in food, but also in non-food items
such as cosmetics and cleaning products.
2. Customer Experience:
With the increasing demand for convenience in the FMCG sector, companies are looking to
significantly improve the customer experience. Start-ups are using augmented reality (AR)
and virtual reality (VR) to make products more engaging and interactive. 3D videos and
gamification attract and entertain customers while providing them with more information
about the product. Investing in improving the customer experience further builds trust and
increases brand loyalty. To this end, more and more FMCG companies are providing
greater convenience with digital technologies.
3. Digitalization:
Digitization is increasingly becoming a priority for FMCG brands as customers interact
with brands through various online and offline channels. Companies gain access to valuable
data from these sources, including various social media platforms, web and mobile
applications. In addition, it also enables FMCG brands to better reach their customers and
convert onetime buyers into repeat customers.
4. FMCG e-Commerce:
The share of sales coming from e-commerce is growing exponentially. The outbreak of the
COVID-19 pandemic has further shifted consumer shopping habits towards online
channels. Brands are now building their online presence to increase their engagement with
consumers. Social media also plays a significant role in the world of e-commerce as more
items are sold through social platforms such as Instagram. To this end, FMCG start-ups are
actively incorporating various media, using mobile and headless commerce, to market their
products.
5. Big Data & Analytics:

FMCG companies are actively using big data to innovate and compete in the industry. As
data becomes more accessible to consumers shopping online, brands are exploring new
ways to strengthen relationships with their customers and gain insights from their
behaviour. Data analytics examines customer preferences and behaviours to provide FMCG
companies with a deeper understanding of their shopping habits. Big data solutions allow
brands to optimize communication with their customers and offer more personalized
experiences.
6. Artificial Intelligence:
Artificial intelligence-based solutions such as Machine Learning (ML) and Natural
Language Processing (NLP) are gaining popularity and creating opportunities for the
FMCG industry. For example, voice systems support consumers 24/7 in product searches,
in addition to recommendation tools that provide personalized product suggestions. By
implementing AIbased solutions, FMCG companies provide a better customer experience,
thereby increasing customer satisfaction and retention.
7. Direct Distribution:
More and more FMCG companies are using direct distribution to increase customer loyalty
and ensure growth. For example, manufacturers communicate directly with their end
customers through their own online and offline distribution channels. This increases their 16
profit margin and offers consumers a direct channel to reach their favourite brands. This
trend in the FMCG industry is closely related to the growth of e-commerce as well as the
penetration of smart phones and the Internet.
8. Internet of Things:
As IoT evolves, its applications are gaining popularity in the FMCG sector. IoT devices are
automated and affordable, enabling FMCG companies to use them in brick-and-mortar
stores, warehouses and manufacturing facilities. One example of implementing IoT devices
is providing targeted messages to customers while they shop. Another is inventory
management, both in stores and warehouses, for which IoT is widely used. Combined with
related emerging technologies, including ambient intelligence and smart objects, IoT is
creating new channels of interaction with consumers and sources of revenue for FMCG
brands.
9. Block chain:
Competition in the FMCG industry is growing and brands are investing in block chain to
gain a competitive edge. Smart contracts and block chain traceability enable FMCG
companies to understand bottlenecks in their supply chain and take necessary interventions.
It also increases transparency for consumers by allowing them to trace the source of their
purchases. In addition, block chain platforms offer crypto currencies and loyalty programs
that allow consumers to collect exchange and redeem points, increasing customer
engagement.
10. 3D Printing:
Additive manufacturing and its applications create revolutionary solutions for the FMCG
industry. The huge amount of waste produced by consumer products, from personal care to
food packaging, is forcing stakeholders in the FMCG industry to look for sustainable
alternatives. 3D printing enables FMCG brands and manufacturers to design and develop
products that use eco-friendly materials and reduce plastic consumption. To this end,
FMCG companies are using 3D printing to prototype, design, tool and scale production in a
sustainable manner. Food companies are also able to offer extra nutritional value in their
products by using 3D food printing.
3.1.5 Competitive Landscape of FMCG:

The Indian FMCG space is largely dominated by unorganized players. However, within an
organized market, different players dominate different segments of the industry. HUL is a
major player in the organized market manufacturing various products related to food and
beverages and home and personal care, which recorded sales of INR 459.9 billion in 2020-
21. It was followed by Patanjali, an Indian company that positioned itself as a manufacturer
of natural and Ayurvedic products and achieved revenues of INR 300 billion in 2020-21.
Nestle India, one of the largest food product manufacturers, recorded sales of INR 132.9
billion in 2020-21. Some other notable players include; Britannia Industries, ITC, Godrej
and P&G.
3.1.6 What are the FMCG Companies?
Here are the top FMCG companies:

1) Hindustan Unilever Ltd
2) ITC Ltd
3) Nestle India Ltd
4) Britannia Industries Ltd
5) Godrej Consumer Products Ltd
6) Patanjali Ayurved Limited
7) Dabur India Ltd
8) Marico Ltd
3.1.7 SWOT Analysis of FMCG Industry:
Strengths:
• Low operating costs.
• Existence of established distribution networks in urban and rural areas.
• Availability of well-known brands in the field of FMCG.
• Deep the roots of local culture! "Re-understanding" of consumer needs.
Weaknesses:
• Lower scope of investing in technology and achieving economies of scale, especially in
small sectors.
• Low exports levels.
• Counterfeit Products. This product narrows the scope of FMCG products in rural and
semi-urban market.
Opportunities:
• Untapped rural market.
• Rising income levels, i.e increase in purchasing power of consumers.
• Large domestic market- a population of over one billion.
• Export potential.
• High consumer goods spending
Threats:
• Removal of import restrictions resulting in replacing of domestic brands.
• Slowdown in rural demand.
• Tax and Regulatory Structure.
3.2 Company Profile

Company Name: Hindustan Unilever Limited
Comapany Address:
‘HINDUSTAN UNILEVER LIMITED (HUL) is a household goods company

Headquartered in Mumbai, India. HINDUSTAN UNILEVER LIMITED was established in
1931 as ‘Hindustan Vanaspati Manufacturing Co.’ and following a merger of an essential
groups in 1956, it was renamed ‘Hindustan Lever Limited’. The company was renewed in
June 2007 as “Hindustan Unilever Limited”. HINDUSTAN UNILEVER LIMITED is an
auxiliary of Unilever, a British company. Hindustan Unilever Limited is India's the largest
Fast Moving Consumer Goods Company being over 80 years in Indian market. In the
summer of 1888, visitors to the Kolkata harbour noticed container full of Sunlight soap
bars, embossed with the words ‘Made in England by Lever Brothers’. With it, began a
period of marketing branded Fast Moving Consumer Goods (FMCG).
Every day, nine out of ten Indian consumers use HINDUSTAN UNILEVER LIMITED's
products. HINDUSTAN UNILEVER LIMITED’s products include foods, beverages,
cleaning agents, personal care products, water purifiers and consumer goods. HINDUSTAN
UNILEVER LIMITED has 28 manufacturing facilities in whole India. Presently
HINDUSTAN UNILEVER LIMITED is selling more than 35 brands in skin care, dental
care, cosmetics, tea, coffee, packaged foods, ice cream, and water purifiers. The
HINDUSTAN UNILEVER LIMITED can be found in every household and is part of the
everyday life of millions of consumers. HINDUSTAN UNILEVER LIMITED works to
build a better future every day and helps people feel good, look good and get more in
association with brands and services that are good for them and good for others.
HUL’s portfolio includes leading household brands such as Lux, Lifebuoy, Surf excel, Rin,
Wheel, Glow & Lovely, Pond’s, Vaseline, Lakme, Dove, Clinic Plus, Sunsilk, Pepsodent,
Closeup, Axe, Brooke Bond, Bru, Knorr, Kissan, Kwality Wall’s, Horlicks and Pureit.
Hindustan Unilever Limited (HUL), formerly Hindustan Lever Limited, is INDIA’s biggest
consumer products company and was formed in 1933 as Lever Brothers India Limited. It is
currently headquartered in Mumbai, India and its 41,000 employees are guided by Harish
Manwani, the non-executive chairman of the board. HINDUSTAN UNILEVER LIMITED
is the number one in Indian products such as tea, soaps, detergents, as its products have
become daily household name in India. The Anglo-Dutch company Unilever owns a
controlling stake in Hindustan Unilever Limited.
3.2.1 SWOT ANALYSIS OF HUL:
Strengths:
• Leader in FMCG Market:Two-thirds of Indian consumers use HUL products, according to
the Nielsen Study. In order to establish itself as a market leader in the Indian market, HUL
has adopted a targeted approach to supply chain and other products.
• Most Preferred Brand: From soap to mineral water, HUL shapes the lives of 1.3 billion
people every day. HUL's presence in the consumer market with its 20 categories such as
soap, tea, bath, shampoo, etc., and a wide range of its products has 21 helped it occupy a
large portion of the shelf space in restaurants and supermarkets, which explains the
acceptance / demand of its products in the market.
• Innovations: Hindustan Unilever Research Center (HURC), Mumbai, and Unilever
Research India, Bangalore, both research centers merged into Bangalore in 2006. make
itself a leader in the consumer goods market.
• High Brand Awareness: HUL has made a name for itself over the years by registering
celebrities to advertise their products. This allowed them to focus their brands on the
community, which was cleverly designed to diversify their revenue streams.
• Wide Range of Products: Provides product categories, i.e., oral care, personal care, home
care, textile care, and pet food, etc., and has a variety of products in all product categories.
• Strong Promoter: With more than 80 years of experience in the consumer goods market
and supported by Unilever, which owns 67% of HUL, the company is financially viable.
• Huge Market Share: As a result of the entry into higher markets, HUL has been able to
maintain its high market share in various product categories.
• Comprehensive and Automated Supply Chain: HUL products are now a household name
due to the four-phase distribution system.
Direct discovery in a city with a population of less than 50,000 by a famous specialty
merchant.
Indirect availability: the target was the immediate vicinity of the wider commercial
markets.Facilitate the use of rural markets to access inaccessible markets by road.
The Shakti Project targeted existing SHGs (self-help groups) for women in small
villages. Based on their accessibility and business opportunities, the markets are divided.
• Social Media: HUL has a strong social media presence with millions of followers on three
of the most popular social media platforms: Facebook, Twitter and Instagram. The company
has a high level of customer interaction and low response time on these channels. • Most
Reputed Brand: This product has always been recognized as a leading FMCG company and
enjoys an excellent reputation.
• Marketing: HUL products are well-known for their strong advertising through TV
commercials, print ads, online advertising, social media and digital marketing.
Weaknesses:
• Declining Market Allocation: Competitors who focus on a specific product that consumes
HUL shares, such as the Ghadi and Nirma purifiers that consume part of the HUL market in
tire washing.
• Large product selection in different product categories: A large portfolio of products often
leads to the wrong setup. Price placement in other segments ensures lower price
competitiveness, such as the market share acquired by Amul of Kwality.
• Limited Market Share: HUL market share is limited due to the presence of other strong
FMCG brands.
• HUL operates in a highly competitive environment and there are very strong and emerging
companies that are less focused on the product and therefore, are consuming part of the
company market.
• HUL currently does not have any ayurvedic or natural products in their portfolio, which is
a negative aspect of the company as the current trend of people shifting to pharmaceutical
products and many other companies that make the most of it.
Opportunities:
• Market expansion: The massive influx of rural markets through Project Shakti AMMA
and the transition from informal businesses to informal businesses will lead to further
expansion of consumer markets.
• Consumer awareness of consumer products: advertising, word of mouth and medical
instructions raise public awareness of consumer products, leading to increased use of these
products.
• Rising income level: due to the stable political climate, high literacy rates and regulatory
inflation, increasing public income increases, leading to higher demand and changing
lifestyles.
• Ayurvedic Products: It can start producing or marketing Ayurvedic products under the
HUL brand name.
• Partnerships: Consolidation and acquisition can continue to strengthen the product over
time.
Threats:
• Market competition: with the increasing number of domestic and national suppliers, it
becomes more and more difficult for businesses to isolate themselves. There is also the
danger that counterfeit products tarnish the image of the product on the market.
• The price of immature goods: an increase in the price of raw materials will lead to a
further increase in prices. Further price increases will lead to a decline in sales, interest rates
and product changes.
• Consumer Strength: In a very different consumer goods market, where many types of
products promise different benefits, it is very difficult for consumers to be loyal to a
particular product. This leads to product change where consumers are able to choose a
product based on various factors such as availability, recommendations from the reference
groups, preferences and price.
• Government policies: Changing government policies and regulations may also directly
affect business policies and procedures.
• HUL operates in a highly competitive environment, with a 100% FDI approved by the
Government. India and new international companies set foot, the company faces a major
threat from its competitors.
• The company relies heavily on raw material prices. Inflation can lower the limits for a
company as it operates in a high-volume, low-cost sector.
• The shift in population to healthy and productive products could help informal and small
companies to increase their market share, which could be a threat to HUL.
3.3 Product Profile

HUL is the leader in the Indian consumer products market with a presence in over 20
consumer categories such as soaps, teas, detergents and shampoos, among others, with over
700 million Indian consumers using its products. Sixteen HUL brands featured in the annual
ACNielsen Brand Equity 100 Most Trusted Brands (2014) survey by Brand Equity, a
supplement of The Economic Times.
FOOD:
• Annapurna salt and Atta (formally known as Kissan Annapurna)
• Bru coffee
• Brooke Bond (3 Roses, Taj Mahal, Taaza, Red Label) tea
• Kissan squashes, ketchups, juices and jams
• Lipton ice tea
• Knorr soups and meal makers and soupy noodles
• Kwality Wall’s frozen dessert
• Hellmann’s mayonnaise
• Magnum (ice cream)
• Cornetto Ice cream cone
• Horlicks (Health drink)
HOME CARE:
• Active Wheel detergent
• Cif cream Cleaner
• Comfort fabric softeners
• Domex disinfectant/toilet cleaner
• Nature Protect disinfectant surface cleaner
• Rin detergents and bleach
• Sunlight detergent and colour care
• Surf Excel detergent and gentle wash
• Vim dishwash
• Magic-Water saver
PERSONAL CARE:
• Aviance Beauty Solutions
• Axe deodorant, aftershave lotion and soap
• LEVER Ayush Therapy ayurvedic health care and personal care products
• International Breeze
• Brylcreem hair cream and hair gel
• Clear anti-dandruff hair products
• Clinic Plus shampoo and oil
• Close Up toothpaste
• Dove skin cleansing & hair care range: bar, lotions, creams and anti-perspirant deodorants
• Denim shaving products
• Glow and Lovely, skin lightening cream
• Hamam
• Indulekha ayurvedic hair oil
• Lakmé beauty products and salons
• Lifebuoy soaps and hand wash range
• Liril 2000 soap
• Lux soap, body wash and deodorant
• Pears soap, Body wash
• Pepsodent toothpaste
• Pond’s talcs and creams
• Rexona
• Sunsilk shampoo
• Sure anti-perspirant
• Vaseline petroleum jelly, skincare lotions
• TRESemmé
• TIGI
WATER PURIFIER:
• Pureit
Chapter 4
THEORETICAL BACKGROUND
4.1 REVIEW OF LITERATURE:
Hindustan Unilever Ltd (HUL) set up its business in 1993 in India. It is one of the largest
fast-moving consumer goods companies (FMCG) in India. HUL earns the highest amount
of profit in a competitive market when large numbers of competitors enter the market. They
achieve their goals through innovation, marketing and good governance. Their research and
development helps them to innovate in product and marketing. The company is ranked 12th
in the list of super 50 companies in the world for the 2012-13 financial year, with Forbes 18
companies listed on ‘100 Most Trusted Brands’ by Brand Equity. HUL mainly submits 250
to 350 patent applications per year. The company has more than 20,000 registered patents
and patent applications worldwide.
Hindustan Unilever Ltd (HUL) set up its business in 1993 in India. It is one of the largest
fast-moving consumer goods companies (FMCG) in India. HUL earns the highest amount
of profit in a competitive market when large numbers of competitors enter the market. They
achieve their goals through innovation, marketing and good governance. Their research and
development helps them to innovate in product and marketing. The company is ranked 12th
in the list of super 50 companies in the world for the 2012-13 financial year, with Forbes 18
companies listed on ‘100 Most Trusted Brands’ by Brand Equity. HUL mainly submits 250
to 350 patent applications per year. The company has more than 20,000 registered patents
and patent applications worldwide.
Andrew and Schmidgall (1993) in their study divided financial estimates into five
categories “liquidity rates, solvency rates, activity rates, profit rates, and performance
measures”. They pointed out that financial estimates themselves do not provide important
information about a company's performance; Andrew (1993) in his study of the automotive
industry investigated the acquisition rate of companies and suggested that there should be a
structure that increases value for money.
Hitchings (1999), in his research noted that rate analysis is a critical and important tool in
debt assessment which predicts the borrower's ability to meet debt obligations.
(Dhingra, Dev, & Gupta, 2018) To analyze the performance of the fast moving consumer
Commodity (FMCG) industry, the discriminating power of financial ratios is investigated
using Wilks lambda and multiple discriminant function analysis. For this purpose, a sample
Eighteen FMCG companies listed on the Bombay Stock Exchange are considered. Market
capitalization is taken as the basis for selecting these companies. Data is collected for
twelve years ranges from 1/4/2006 to 31/3/2017. For the effective implementation of
discrimina. The analysis first calculates average stock market returns from annual stock
prices selected companies and average stock market returns are classified into three groups,
i.e. "Market Underperform", "Market Average" and "Market Outperform". It has operating
income/share is found to be the most important ratio and has an impact to assess the market
performance of the company. Own debt to inventory turnover ratio which have a moderate
impact on the performance evaluation of companies in the stock market and the dividend
payout ratio is a ratio that has less impact on a company's stock valuation market
performance.
Zopounidis (2000) in his research proposes a methodological framework based on financial
analysis to measure the performance of small and medium enterprises, Hsieh and Wang
(2001) in their research examined and emphasized the need to select appropriate financial
estimates for analysis purposes. They have proposed a new way of obtaining a useful
financial measure and emphasized that the industry varies in product, size and has its own
business processes that are different from the internal and external environment so financial
analysis should be in line with the most appropriate industry.
(Sar & Technology, 2015) The paper aims to gain insight into the impact of competitive
advantage on firm performance. Ten years of financial data are taken to analyze competitive
advantage and performance. A regression analysis of panel data is performed to derive
determinants of profitability. Between cost advantage and differentiation advantage, the
former was found to be the greater driver of performance. The level of risk measured by
financial leverage also contributes significantly to firm performance. The contribution
complements the existing knowledge base with a competitive advantage. For practitioners,
the paper can help gain deeper insight into the changing landscape of competitive
advantage.
Drs. Sugan C.Jain (2002) in his study examined the functioning of the automotive industry.
He used a combination indicator method to measure efficiency and effectiveness and
profitability and suggested strengthening soundness, profit improvement, operating cost and
performance of fixed assets.
(Wang, 2022) Procter & Gamble (P&G) is a global leader in the fast-moving consumer
goods (FMCG) industry. Since P&G entered the Chinese market, it has experienced rapid
development. The purpose of this paper is to analyze the development process of P&G in
China using PEST analysis, SWOT analysis, financial analysis and prospect analysis. The
article first conducts a strategic analysis to evaluate P&G's internal environment and
external business environment, and uses data analysis to compare economic indicators such
as GDP, 60 GDP per capita, consumer spending, and CPI between China and the United
States.
Subsequently, sales, cost and profit data for the last five years will be used to analyze P&G's
business in China from 2016 to 2020. The analysis also compares P&G with competitor
Unilever based on accounting ratios. Finally, P&G's future financial prospects will be
predictions and suggestions will be made.
Srinivas K T said Karnataka Power Corporation Limited (KPCL) is a major contributor to
power generation and is the sole electricity regulator in the province. The current study was
directed to evaluate the financial performance of Karnataka Power Corporation Limited
with the help of various estimates. In the present study it is found that the financial
performance of the company seems reasonable, because the company is trying to grow its
product with a residual profit.
(Khan, 2021) COVID-19 has affected lives around the world and India was no exception. It
has affected almost every business, but how has it affected our FMCG sector? Business
performance can be measured in a variety of ways, but generally financial performance is
measured by evaluating liquidity, profitability, efficiency and leverage. This study attempts
to evaluate the financial performance of the nine largest FMCG companies listed on the
BSE to see the impact of COVID-19 on their financial health. The results show that there
has been an impact on the liquidity, profitability and efficiency of the FMCG sector.
Chetan C. Patel and Kishorsinh N. Chavda Gujarat State District Financial Coordination
(DCCBS) Financial Performance Analysis based on Liquidity Ratio, the second data
collected in the annual reports of these selected District Central CoOperative banks. Those
who spend money details of the statement include the Company's management teams,
investors, debtors, government monitoring agencies and internal revenue services.
(Satyaprasad & H., 2019) The financial sector is booming and the need for risk and return
analysis is growing. Also, due to the highly complex behaviour of the stock market, it has
become mandatory to manage the portfolio in such a way as to reduce risk while
maximizing returns. With regard to the investor's risk return requirements, the portfolio
should be compiled and regularly reviewed. The analysis of testing the relationship between
risk and return for stocks shows that of all the different risk variables considered in the
study, it confirms the operation of the trade-off between risk and return for stocks. A
positive association was also shown between the correlation of stock market returns and the
average rate of return during the study period of the study. It also reveals the relationship
between systematic risk and stock returns. Therefore, investors must make a decision before
investing in stocks.
S.Sathya and Dr.R.Marani Financial Analysis is a process of identifying the financial
strengths and weaknesses of a company by effectively establishing the relationship between
the Balance Sheet items and the Profit and Loss Account. The project work is the result of a
"course of financial analysis of the circulating machinery of the Coimbatore city". The
research design is a descriptive research design and secondary data was collected from the
research websites published by the research organization. Tools used to analyze to evaluate
the comparative ratio of a balance sheet.
Snehla and G.C.Wta Bhodia Khera the automotive industry has continued its growth over
the past few years The Indian auto industry has an important role to play in the global
automotive market. ‘Profit is the engine that runs the business of the business’. There
should be enough profit for every firm or business to survive and grow over time. In this
research paper, a rating analysis was performed to compare the financial statements and
balance sheets of Mahindra and Mahindra co. and provide suggestions for improving the
efficiency of the company.
According to John N. Myer, "An analysis of the financial statements is basically a study of
the relationship between the different financial aspects of an entity, as disclosed by a single
set of statements and the study of these factors as reflected in the series of statements". The
term “Financial Analysis” is also known as the analysis and interpretation of financial
statements, referring to the system of determining the financial strengths and weaknesses of
a company by establishing strategic relationships between asset balances, profit and loss
account and other performance information.
Chapter 5
RESEARCH METHODOLOGY
5.1 Research Objectives:
• To determine profitability, liquidity, economic status position of the HUL.
• To evaluate the competence capacity of HUL.
• Recommendations based on findings.
• Shows insight of the company’s performance.
• To determine market share and market position of the company.
5.2 Scope of the study:

• This study of “Financial Performance Analysis of Hindustan Unilever Limited” is
important because just making a profit is not enough, the business needs to earn enough to
cover its capital costs and create more revenue to grow. So to get more profit made
important.
• This study provides internal and external stakeholders with the opportunity to make
informed investment decisions.
• The study aims to analyse the liquidity, profitability, solvency of the factory and the
efficiency that transforms its resources into a service.
• It helps to improve the knowledge of business analysts and investors in various
companies.
5.3 Research Design:

• In this project I have used descriptive method of the study.
5.4 Research Instrument:

• Here project analysis is made by collecting secondary data from different websites,
research papers, etc.
• Secondary data’s are pre published and research data’s collected from different websites,
journals, newspapers, company research papers.
• These documents and data’s are very useful for the theoretical, conceptual and
organizational background analysis.
• Detailed analysis of data’s is made by plotting different graphs and tables which can be
easily understandable.
• Then by observing these graphs we have made our conclusion and recommendations.
5.5 Data Collection Methods:
Secondary Data:
• One of the most popular ways to collect secondary data is to use the internet. Data is easily
accessible online and can be downloaded with the click of a button.
• This is a complete study analyses with secondary data. Data is collected from HUL
Official web site, used HUL annual reports and I have used it various websites like
moneycontrol.com.
• Ratios used as the overall performance analysis of HUL.
Chapter 6
DATA ANALYSIS & INTERPRETATION
6.1 FINANCIAL RATIOS:
6.1.1 Profitability Ratio:

1. Gross Margin:
The gross margin ratio can vary by company and industry. The higher the gross margin, the
higher the performance of the business. This ratio also gives owners a picture of how
production costs affect their income. This ratio can be calculated using the following
formula:
Gross Margin in % = (EBIT ÷ Sales) × 100
Year EBIT Sales Gross Margin
2018 7367 34525 21.34
2019 8777 38224 22.96
2020 9395 38785 24.22
2021 10825 45996 23.53
2022 11871 51193 23.19
The higher the gross margin, the higher the performance of the company. From the graph it
is seen that the gross margin increases after 2018, but after 2020 there is a slight decrease.
Thus, after 2020, the performance of the company is seen to be a little weak. Gross margin
is highest for the financial year 2020 and lowest for the year 2018.
2. Profit Margin:
Profit margin helps investors assess whether a company's management is generating enough
profit from sales and whether operating and overhead costs are under control. Profit margin
is one of the most important indicators of a company's overall financial health. It is
expressed in percentages and is calculated using the following formula.
Profit Margin = (Profit after Tax ÷ Sales) × 100
Year Profit after Tax Sales Profit Margin
2018 5237 34525 15.17
2019 6036 38224 15.79
2020 6738 38785 17.37
2021 7954 45996 17.29
2022 8818 51193 17.23
Profit margin defines a company’s overall profitability. If the profit of the firm is high then
the profit margin will be high. From the chart it is clear that the profit margin has been
increasing since 2019. Profit margin is highest for the financial year 2020 and lowest for the
year 2018.
3. Return on Capital Employed Ratio:
One of the most popular interest rates used by investors, the return on capital employed
determines the company's profit in relation to the amount of money used by it. Unlike ROE,
where only shareholders' investments are made, ROCE also considers corporate debt
obligations.
Return on Capital Employed (ROCE) in % = (EBIT Overall Capital Employed) × 100
Where, Overall Capital Employed = Total Assets – Current Liabilities
Year EBIT Total Assets Current Return on
Liabilities Capital
Employed
Ratio
2018 7367 17149 8636 86.54
2019 8777 17865 8353 92.27
2020 9395 19602 9104 89.49
2021 10825 68116 10841 18.90
2022 11871 69737 10944 20.19
Return on capital employed gives company’s financial position and overall profitability of
the company. If the ratio is high this depicts that the company has provided good returns to
the shareholders. Here from the graph it is clear that ROCE has been decreasing from the
year 2019. Then in financial year 2022 ROCE increased slightly. Highest ROCE is recorded
in financial year 2019.
4. Return on Shareholder’s Equity:

One of the most widely used measurements in basic analysis; the return on equity ratio
helps you determine a company's ability to make a profit using only the funds from its
shareholders. It gives you a good idea of a return on Production Company for all 100 rupees
invested by shareholders. When the ROE is high, the company makes good use of
shareholders' money to make a profit. This ratio is expressed in percentages and can be
calculated using the following formula:
Return on equity (ROE) in % = (Profit after Tax Shareholder’s Equity) × 100
Year Profit after Tax Shareholder's Return on
Equity Shareholder's
Equity
2018 5237 7075 74.02
2019 6036 7659 78.81
2020 6738 8031 83.90
2021 7954 47434 16.77
2022 8818 48760 18.08
The higher the percentage, the more money is being returned to investors. This ratio helps
business owners and financing professionals determine a company's financial health. The
above chart shows that this ratio increases till 2020, but decreases in 2020-2021. And after
2021 there will be a slight increase.
5. Return on Assets:
The return on assets ratio gives you an idea of how well a company can use its assets to
generate revenue. High returns on assets indicate that a company is good at using its assets
to make a profit. It is expressed in percentages and is calculated using the following
formula.
Return on Assets (ROA) in % = (Profit after Tax Average Total Assets) × 100
Year Profit after Tax Average Total Return on Assets

Assets
2018 5237 15950 32.83

2019 6036 17507 34.48
2020 6738 18733.5 35.97
2021 7954 43859 18.14
2022 8818 68926.5 12.79
This ratio defines a company’s profitability based on assets it has. Here from the graph it is
clear that return on assets is showing decreasing trend since 2020, this shows the firm’s
weak financial performance. The lowest was recorded for the financial year 2022 and
highest for the financial year 2020.
6. Earning Per Share:

Earnings per share, or EPS, is a common metric used to measure company value. It can be
defined as the value of earnings per share of a company's outstanding common stock. EPS
shows a company's profitability by showing how much money the business makes for each
share of its stock. It is calculated using the following formula:
Earning Per Share = Profit after Tax ÷ No. Of Equity Share
Year Profit after Tax No. Of Equity Share Earning Per
Share
2018 5237 216 24.25
2019 6036 216 27.94
2020 6738 216 31.19
2021 7954 235 33.85
2022 8818 235 37.52
The amount of earnings that the firm is generating for its shareholders is a key issue for
most investors. An increase in the earning per share is generally considered to be a very
good thing. The above chart shows that after 2018, the earning per share is increasing.
6.1.2 Turnover Ratio:
1. Stock Turnover Ratio:
The stock turnover ratio determines the number of times a company has been able to sell
and replenish its stock of finished goods. It usually calculates for a period of time. The
formula for calculating Stock Turnover Ratio is as follows:
Stock Turnover Ratio = Revenue ÷ Average Stock
Year Revenue from Average Stock Stock Turnover
Operation Ratio
2018 33926 2360.5 14.37
2019 37660 2390.5 15.75
2020 38273 2529 15.13
2021 45311 3009.5 15.06
2022 50336 3636.5 13.84
Stock Turnover Ratio shows how effectively inventory is managed. In general, a higher
value of stock turnover indicates better performance and lower value means inefficiency in
controlling inventory levels. The chart above shows that the company's inventory has not
been maintained evenly since 2019.
2. Debtors Turnover Ratio:
The Debtor Turnover Ratio is also known as the Accounts Receivables turnover ratio. It
indicates the number of times average borrowers were converted to cash during the year.
This is also referred to as the efficiency ratio, which measures a company's ability to collect
revenue. It is calculated using the following formula:
Debtors Turnover Ratio = Revenue from Operation ÷ Average Trade Receivable
Year Revenue from Average Trade Debtors Turnover
Operation Receivable Ratio
2018 33926 1037.5 32.70
2019 37660 1355.25 27.79
2020 38273 1359.5 28.15
2021 45311 1347 33.64
2022 50336 1790 28.12
A high receivables turnover ratio can indicate that a company's collection of accounts
receivable is efficient and that it has a high proportion of quality customers who pay their
debts quickly. The above chart shows that this ratio is seen increasing by 2021 as compared
to 2018, But after 2021 it decreases slightly.
3. Working Capital Turnover Ratio:

Working capital turnover measures how efficient a business is at generating sales for every
dollar of working capital that has been used. A higher working capital turnover ratio is
better and indicates that the company is able to generate more volume of sales. It is
calculated using the following formula:
Working Capital Turnover Ratio = Revenue ÷ (Current Assets – Current Liabilities)
Year Revenue Current Assets Current Working
Liabilities Capital
Turnover
Ratio
2018 35094 11139 8636 14.02
2019 38888 11374 8353 12.87
2020 39518 11908 9104 14.09
2021 46509 13640 10841 16.62
2022 51586 14647 10944 13.93
Higher ratio means higher performance of the firm. From the graph it is clear that working
capital turnover ratio has been decreasing since 2018. It shows that firm is not using its
working capital effectively. The highest data was recorded for the financial year 2021 and
lowest in 2019.
6.1.3 Liquidity Ratio:

1. Current Ratio:
The Current Ratio is a liquidity ratio that measures a company’s ability to pay off its short
term debts and obligation, which are typically due within one year. It tells you whether the
company has enough current/liquid assets to repay its short-term dues. The formula for
current ratio is as follow.
Current Ratio = Current Assets ÷ Current Liabilities
Year Current Assets Current Liabilities Current Ratio
2018 11139 8636 1.29
2019 11374 8353 1.36
2020 11908 9104 1.31
2021 13640 10841 1.26
2022 14647 10944 1.34
Higher the current ratio higher will be the firm’s capability to pay its obligations. From the
graph it is evident that the firm’s shows decline in current ratio for the year 2021 followed
by 2019. It would have been difficult for the firm to pay off its obligations. There was a
slight increase in current ratio for the year 2022. Current ratio is highest for the year 2019
and lowest for the year 2021.
2. Quick Ratio:
Quick Ratio measures the ability of a business to pay its short-term liabilities. In an industry
where revenue is stable and predictable, such as retail, a lower ratio would be good, because
the expected revenue could be calculated to provide the required revenue. On the other
hand, in a dynamic or seasonal industry, a high quick ratio will protect a company from a
lack of revenue.
The formula for Quick Ratio is as follow:
Quick Ratio = (Current Assets – Inventory) ÷ Current Liabilities
Year Current Assets Inventory Current Current
Liabilities Liabilities
2018 11139 2359 8636 1.02
2019 11374 2422 8353 1.07
2020 11908 2636 9104 1.02
2021 13640 3383 10841 0.95
2022 14647 3890 10944 0.98
Quick ratio for a business is 1:1. Higher the quick ratio higher is the liquidity for the
business. From the graph it is clear that quick ratio is highest for the year 2019 and lowest
for the year 2021 in relation to current assets. For the current year is 0.98:1.
3. Cash Ratio:
The Cash Ratio considers only the Cash and Cash Equivalents. If the company has the
higher cash ratio, it is more likely to be able to pay its short-term liabilities. The formula for
calculating Cash Ratio is as follow.
Cash Ratio = Cash & Cash Equivalents ÷ Current Liabilities
Year Cash & Cash Current Liabilities Cash Ratio
Equivalents
2018 3373 8636 0.39
2019 3688 8353 0.44
2020 5017 9104 0.55
2021 4321 10841 0.40
2022 3618 10944 0.33
A cash ratio equal to or greater than 1 indicates a company has enough cash and cash
equivalents to entirely pay off all short-term debts, while a ratio under 0.5 is considered
risky as the entity has twice as much short-term debt compared to cash. The above chart
shows that the cash ratio is increasing in 2020, while the ratio is decreasing after 2020.
6.1.4 Leverage Ratio:

1. Debt to Equity Ratio:
One of the most popular measurement ratios, the Debt to Equity Ratio determines the share
of debt in that equity in a company. Debt to equity ratio greater than 1 means that a
company has more debt than equity, while a rate less than 1 indicates that the equity portion
exceeds the debt. Debt to equity ratio 1 indicates that the company has equal parts of debt
and equity.
Here is how we can calculate the ratio.
Debt to Equity = Debt ÷ Equity
Year Debt Equity Debt Equity Ratio
2018 0 7075 0
2019 0 7659 0
2020 0 8031 0
2021 0 47434 0
2022 0 48760 0
Since the company is debt free, the Debt to Equity Ratio for last 5 years is 0. Lower the
Debt to Equity Ratio company is on the safer side. From the graph it is evident that HUL
has strong financial stability as its debt to equity ratio is very low for last four years.
2. Debt to Total Capital Ratio:

The debt-to-equity ratio is a measure of a company's financial leverage. The debt-to-equity
ratio is calculated by taking a company's interest-bearing debt, short-term and long-term
liabilities, and dividing it by total equity. It is calculated using the following formula:
Debt to Total Capital Ratio = Debt ÷ Capital Employed
Year Debt Capital Employed Debt to Total
Capital Ratio
2018 0 8513 0
2019 0 9512 0
2020 0 10498 0
2021 0 57275 0
2022 0 58793 0
The higher the debt to capital ratio, the riskier the company. This is because a higher ratio,
the more the company is funded by debt than equity, which means a higher liability to repay
the debt and a greater risk of forfeiture on the loan if the debt cannot be paid timely. The
above chart shows that this ratio is 0 in 2018, 2019, 2020, 2021 & 2022. So it can be said
that the company has no risk.
3. Debt to Total Assets Ratio:

The debt-to-total assets ratio shows how much of the business is owned by creditors (people
it has borrowed money from) compared to how much of the company's assets are owned by
shareholders. It is calculated using the following formula:
Debt to Total Assets Ratio = Debt ÷ Total Assets
Year Debt Total Assets Debt to Total
Assets Ratio
2018 0 17149 0
2019 0 17865 0
2020 0 19602 0
2021 0 68116 0
2022 0 69737 0
If the debt to total assets ratio is greater than one, a business has more debt than assets. If
the ratio is less than one, the business has more assets than debt. A ratio greater than 1
indicates that a significant portion of assets is funded with debt and that the company has a
higher default risk. Therefore, the lower the ratio, the safer the company. The above chart
shows that this ratio is 0 for the year 2018 to 2022 so the company is safe.
4. Proprietary Ratio:
Proprietor’s ratio is a type of solvency ratio that is useful for determining the amount or
contribution of shareholders or proprietors towards the total assets of the business. It is also
known as equity ratio or shareholder equity ratio or net worth ratio. The formula for
calculating Proprietor’s Ratio is as follow.
Proprietary Ratio = Shareholder’s Equity ÷ Total Assets
Where,
Proprietor’s Funds = Equity Share Capital + Reserves and Surplus
Year Shareholder's Total Assets Proprietary Ratio
Equity
2018 7075 17149 0.41
2019 7659 17865 0.43
2020 8031 19602 0.41
2021 47434 68116 0.70
2022 48760 69737 0.70
The proprietary ratio depicts a firm’s financial leverage capacity and strength. For the year
2019 and 2020 proprietary ratio shows decreasing trend and there was a slight increase in
financial year 2021. In 2021 this ratio is 0.70 but remains stable in 2022. There is no
increase or decrease in it, which is satisfactory.
5. Interest Coverage Ratio:

The interest coverage ratio is a debt-to-profitability ratio that is used to determine how
easily a company can pay interest on its outstanding debt. The interest coverage ratio is
calculated by dividing a company's earnings before interest and taxes (EBIT) by its interest
expenses during a given period. It is calculated using the following formula:
Interest Coverage Ratio = EBIT ÷ Interest
Year EBIT Interest Interest Coverage
Ratio
2018 7367 20 368.35
2019 8777 28 313.46
2020 9395 106 88.63
2021 10825 108 100.23
2022 11871 98 121.13
A higher interest coverage ratio indicates stronger financial health and the company is more
capable of meeting interest obligations. Thus, the above chart shows that the interest
coverage ratio has been declining since 2018, but has seen a slight increase after 2020.
6.2 HORIZONTAL ANALYSIS:

Horizontal analysis is used when reviewing a company's financial statements for multiple
periods. It is usually shown as percentage growth on the same line item in the base year.
Horizontal analysis allows users of financial statements to easily identify trends and patterns
of growth.
Profit & Loss Account:
Comparative Profit and Loss Account for the year 2017 & 2018:
Increase(Decrease)
2018 2017 Amount %
Sales 34525 31890 2635 8.26
Other Income 569 526 43 8.17
Total Revenue 35094 32416 2678 8.26
Expenses -27747 -26261 -1486 5.66
Profit before Exceptional Items & Tax 7347 6155 1192 19.37
Exceptional Items -62 241 -303 -125.73
Profit before Tax 7285 6396 889 13.90
Tax -2048 -1906 -142 7.45
Net Profit 5237 4490 747 16.64
Increase(Decrease)
2019 2018 Amount %
Sales 38224 34525 3699 10.71
Other Income 664 569 95 16.70
Total Revenue 38888 35094 3794 10.81
Expenses -30139 -27747 -2392 8.62
Exceptional Items -227 -62 -165 266.13
Tax -2486 -2048 -438 21.39
Net Profit 6036 5237 799 15.26
Increase(Decrease)
2020 2019 Amount %
Sales 38785 38224 561 1.47
Other Income 733 664 69 10.39
Total Revenue 39518 38888 630 1.62
Expenses -30229 -30139 -90 0.30
Exceptional Items -197 -227 30 -13.22
Tax -2354 -2486 132 -5.31
Net Profit 6738 6036 702 11.63
Increase(Decrease)
2021 2020 Amount %
Sales 45996 38785 7211 18.59
Other Income 513 733 -220 -30.01
Total Revenue 46509 39518 6991 17.69
Expenses -35792 -30229 -5563 18.40
Exceptional Items -227 -197 -30 15.23
Tax -2536 -2354 -182 7.73
Net Profit 7954 6738 1216 18.05
Increase(Decrease)
2022 2021 Amount %
Sales 51193 45996 5197 11.30
Other Income 393 513 -120 -23.39
Total Revenue 51586 46509 5077 10.92
Expenses -39813 -35792 -4021 11.23
Exceptional Items -34 -227 193 -85.02
Tax -2921 -2536 -385 15.18
Net Profit 8818 7954 864 10.8
Interpretation of P&L:
If we see in horizontal analysis, it has taken 2 years. One is the previous year and the other
is the current year. The percentage of the current year is calculated by considering the
previous year. So we can see that the sales has increased by 3.04% in 2021-2022 as
compared to 2017-2018, total revenue has increased by 2.66% in 2021-2022, In 2021-2022,
the expenses have increased by 5.57%, Exceptional items were -125.73% in 2017-2018 and
- 85.02% in 2021-2022, Taxes also see an increase of 7.73% in 2021-2022. From the overall
performance we can see that the net profit decreases by 5.78% in 2021-2022.
Balance Sheet:
Comparative Balance Sheet for the year 2017 & 2018:

Increase(Decrease)
2018 2017 Amount %
Shareholder's Funds and Liabilities:
Share Capital 216 216 0 0
Reserves and Surplus 6859 6274 585 9.32
Non-Current Liabilities 1438 1059 379 35.79
Current Liabilities 8636 7202 1434 19.91
Total Funds 17149 14751 2398 16.26
Assets:
Fixed Assets 4572 4227 345 8.16
Non-Current Investments 256 260 -4 -1.54
Deferred Tax Assets 255 160 95 59.38
Long Term Loans and Advances 404 352 52 14.77
Other Non-Current Assets 523 387 136 35.14
Total Current Assets 11139 9365 1774 18.94
Total Assets 17149 14751 2398 16.26

Increase(Decrease)
2019 2018 Amount %
Current Liabilities 8353 8636 -283 -3.28
Total Funds 17865 17149 716 4.18
Assets:
Fixed Assets 4716 4572 144 3.15
Non-Current Investments 256 256 0 0
Deferred Tax Assets 339 255 84 32.94
Long Term Loans and Advances 396 404 -8 -1.98
Total Assets 17865 17149 716 4.18

Increase(Decrease)
2020 2019 Amount %
Total Funds 19602 17865 1737 9.72
Assets:
Fixed Assets 5569 4716 853 18.09
Non-Current Investments 252 256 -4 -1.56
Deferred Tax Assets 261 339 -78 -23.01
Total Assets 19602 17865 1737 9.72

Increase(Decrease)
2021 2020 Amount %
Share Capital 235 216 19 8.80
Total Funds 68116 19602 48514 247.50
Assets:
Fixed Assets 51650 5569 46081 827.46
Non-Current Investments 312 252 60 23.81
Deferred Tax Assets 0 261 -261 -100.00
Total Assets 68116 19602 48514 247.50

Increase(Decrease)
2022 2021 Amount %
Total Funds 69737 68116 1621 2.38
Assets:
Fixed Assets 51935 51650 285 0.55
Non-Current Investments 612 312 300 96.15
Deferred Tax Assets 0 0 0 0
Total Assets 69737 68116 1621 2.38
Interpretation of Balance Sheet:

If you look at the balance sheet, Share Capital was zero in 2017-2018 but it is also zero in
2021-2022, Looking at Reserves and Surplus, it is seen that there has been a decline of
6.51% in 2021-2022, Looking at non-current liabilities, it is seen that there has been a
decrease of 33.84% in 2021-2022, Current liabilities are seen to decrease by 18.96% in
2021-2022, Fixed assets are seen to decrease by 7.61% in 2021-2022, Non-current
investment was -1.54% in 2017-2018 but increased to 96.15% in 2021-2022, Deferred tax
assets were 59.38% in 2017- 2018 but have become 0 in 2021-2022, Long term loans and
advances have decreased by 10.73% in 2021-2022 as compared to 2017-2018, Other non-
current assets have decreased by 34.74% in 2021-2022 as compared to 2017-2018, Total
Current Assets decreased by 11.56% in 2021-2022 as compared to 2017-2018
6.3 TREND ANALYSIS:

Trend analysis evaluates the organization's financial information for a certain period of
time. The period can be measured in months, quarters or years depending on the
circumstances. The goal is to calculate and analyze the change in amount and percentage
change from one period to another.

2022 2021 2020 2019 2018
Sales 51193 45996 38785 38224 34525
Other Income 393 513 733 664 569
Total Revenue 51586 46509 39518 38888 35094
Expenses 39813 35792 30229 30139 27747
Profit before Exceptional 11773 10717 9289 8749 7347
Items & Tax
Exceptional Items 34 227 197 227 62
Profit before Tax 11739 10490 9092 8522 7285
Tax 2921 2536 2354 2486 2048
Net Profit 8818 7954 6738 6036 5237
Trend Analysis
Sales 148 133 112 111 100
Other Income 69 90 129 117 100
Total Revenue 147 133 113 111 100
Expenses 143 129 109 109 100
Items & Tax
Tax 143 124 115 121 100
Net Profit 168 152 129 115 100
Interpretation of P&L:
The trend percentages indicate that 2022 sales are 1.48 times of 2018 sales, a rise of 48 per
cent, Other income has declined to 69 per cent in 2022 compared to 2018 a 31 per cent
decline, The total revenue has increased by 47 percent. That is, 147 per cent happened,
Compared to 2018, expenses have increased to 143 per cent in 2022, which means an
increase of 43 per cent, Exceptional items see a steep decline, increasing by as much as 45
per cent, Tax has also increased to 43 per cent and finally we see that the net profit has
increased to 68 per cent.
Balance Sheet:
2022 2021 2020 2019 2018
Shareholder's Funds and
Liabilities:
Share Capital 235 235 216 216 216
Reserves and Surplus 48525 47199 7815 7443 6859
Non-Current Liabilities 10033 9841 2467 1853 1438
Current Liabilities 10944 10841 9104 8353 8636
Total Funds: 69737 68116 19602 17865 17149
Assets:
Fixed Assets 51935 51650 5569 4716 4572
Non-Current Investments 612 312 252 256 256
Deferred Tax Assets 0 0 261 339 255
Long Term Loans and 541 520 453 396 404
Advances
Other Non-Current Assets 2002 1994 1159 784 523
Total Current Assets 14647 13640 11908 11374 11139
Total Assets: 69737 68116 19602 17865 17149
Trend Analysis
Liabilities:
Share Capital 109 109 100 100 100
Total Funds: 407 397 114 104 100
Assets:
Fixed Assets 1136 1130 122 103 100
Deferred Tax Assets 0 0 102 133 100
Advances
Total Assets: 407 397 114 104 100

From the above trend analysis we can say that there is an increase of 9 per cent in Share
Capital in 2022 as compared to 2018, Reserve and Surplus is 100 in 2018 but has become
707 in 2022, non-current liabilities are 100 in 2018 but increased to 698 in 2022, Current
liabilities are 100 in 2018 but increased to 127 in 2022, The fixed assets were 100 in 2018
and increased to 1136 in 2022, Non-current investments are seen to increase to 239 in 2022
as compared to 2018, Deferred tax assets are found to be 0 in 2022, Long term loans and
advances are seen to increase by 34 in 2022 as compared to 2018, Other non-current assets
are seen to increase to 283 in 2022, Total current assets are seen to increase by 31 in 2022.
That means we can say that the total funds or total assets which we had in 2018 was 100 has
increased to 407 in 2022.
6.4 VERTICAL ANALYSIS:

Vertical analysis is a method of financial statement analysis that lists each line item as a
percentage of the underlying value in the statement. The first line of the statement always
shows a base value of 100%, with each following line item representing a percentage of the
whole.

2022 2021 2020 2019 2018
Sales and Other Income 51586 46509 39518 38888 35094
Expenses 39813 35792 30229 30139 27747
Items & Tax
Tax 2921 2536 2354 2486 2048
Net Profit 8818 7954 6738 6036 5237
Vertical Analysis
Sales and Other Income 100 100 100 100 100
Expenses 77.18 76.96 76.49 77.50 79.06
Profit before Exceptional 22.82 23.04 23.51 22.50 20.94
Items & Tax
Exceptional Items 0.07 0.49 0.50 0.58 0.18
Profit before Tax 22.76 22.55 23.01 21.91 20.76
Tax 5.66 5.45 5.96 6.39 5.84
Net Profit 17.09 17.10 17.05 15.52 14.92
Interpretation of P&L Account:

From the above vertical analysis, we can see that 100 have been conducted for sales and
other income. In 2018, Expenses was 79.06 and in 2022 it has decreased to 77.18, after that,
if we look at the exceptional items, it was 0.18 in 2018 and it has decreased to 0.07 in 2022,
The tax was 5.84 in 2018 but has decreased to 5.66 in 2022, Net profit was 14.92 in 2018
and increased to 17.09 in 2022.
Balance Sheet:
2022 2021 2020 2019 2018
Liabilities:
Share Capital 235 235 216 216 216
Total Funds: 69737 68116 19602 17865 17149
Assets:
Fixed Assets 51935 51650 5569 4716 4572
Deffered Tax Assets 0 0 261 339 255
Advances
Total Assets: 69737 68116 19602 17865 17149
Vertical Analysis
Liabilities:
Share Capital 0.34 0.34 1.10 1.21 1.26
Reserves and Surplus 69.58 69.29 39.87 41.66 40.00
Non-Current Liabilities 14.39 14.45 12.59 10.37 8.39
Current Liabilities 15.69 15.92 46.44 46.76 50.36
Total Funds: 100 100 100 100 100
Assets:
Fixed Assets 74.47 75.83 28.41 26.40 26.66
Non-Current Investments 0.88 0.46 1.29 1.43 1.49
Deferred Tax Assets 0 0 1.33 1.90 1.49
Long Term Loans and 0.78 0.76 2.31 2.22 2.36
Advances
Other Non-Current Assets 2.87 2.93 5.91 4.39 3.05
Total Current Assets 21.00 20.02 60.75 63.67 64.95
Total Assets: 100 100 100 100 100
From the above vertical analysis, we can see that 100 have been conducted for total funds or
total assets. So we can see that the share capital in total funds was 1.26 in 2018 but has
decreased to 0.34 in 2022, reserve and surplus has increased from 40 in 2018 to 69.58 in
2022, Non-current liabilities has increased from 8.39 in 2018 to 14.39 in 2022, The current
liabilities was 50.36 in 2018 and has decreased to 15.69 in 2022. Similarly, if we look at the
assets, the fixed assets in the total assets increased from 26.66 in 2018 to 74.47 in 2022,
Noncurrent investments have decreased from 1.49 in 2018 to 0.88 in 2022, Deferred tax
assets were 1.49 in 2018 and have become zero in 2022, Long term loans and advances
decreased from 2.36 in 2018 to 0.78 in 2022, Other Non-Current Assets decreased from
3.05 in 2018 to 2.87 in 2022, and lastly, total current assets have decreased from 64.95 in
2018 to 21 in 2022.
Chapter 7
FINDINGS
Hindustan Unilever Limited's profit margin is said to be slightly better as it is seen
increasing. It shows that the financial performance of the company is good.
Current Ratio of HUL is more than 1 it means company does have enough liquid assets to
cover its short-term liabilities.
The quick ratio of HUL is near to ideal quick ratio. This is a positive sign for the firm
because it has more quick assets in the current assets. Its indicates that the company has
sufficient liquid assets to satisfy its short-term obligation.
HUL has strong financial leverage as their Debt to Equity Ratio is very low (0) for the last 5
financial year on account of nil borrowings. Its indicates that company has low risk.
Return on Assets and Return on Capital Employed has been showing decreasing from the
year 2020 and this defines the firm’s unstable financial performance and ineffectively
capital utilization.
HUL’s financial position is stable as its proprietary ratio shows an increasing trend and
firm’s ability to meet long-term debts is satisfactory.
From the horizontal analysis it can be said that the net profit is decreasing due to increase in
expenses and exceptional items.
From the trend analysis, it is seen that the net profit increases every year, taking 2018 as the
base year. Its indicates that the company has good financial health.
A vertical analysis shows that the biggest part is expenses. Net profit does not increase due
to higher expenses.
Chapter 8
SUGGESTIONS
To increase the gross margin, the company should reduce the production cost so that the
profit can increase.
HUL should concentrate more on its working capital utilization. Proper allocation and
utilization of working capital would help HUL to increase its net profit margin.
The cash ratio shows very low so the company should reduce its expenses a little to increase
this ratio.
A company should reduce its incremental costs to increase its net profit.
HUL should concentrate more on technology and innovation and new products to meet the
customer’s needs and desires.
HUL’s global networking team should increase their e-commerce channel in all parts of
India including remote rural areas to increase their market share.
Chapter 9
LIMITATIONS OF THE PROJECT
• 5 years data was only analysed for conducting this study.
• Only secondary data was collected for the study.
Chapter 10
CONCLUSION
Hindustan Unilever Limited is a leading FMCG company in India and from last three
consecutive years has shown accelerated growth in FMCG portfolio. Customers in India are
also spending more in FNCG as their standard of living is growing. HUL has placed itself
successfully in the position of market leader in FMCG products.
The company has a good market position despite facing strong competition from local and
global FMCG players. Thanks to its presence, it enjoys a leading market position in various
consumer categories. HUL's established business model is a treat for investors looking for
exposure to the FMCG segment. The company has delivered in the past and has the
potential to be better in the future.
Analysis of financial statements refers to the treatment of information contained in the
financial statement in a way so as to afford a full diagnosis of the profitability and financial
position of the firm concerned. The process of analysing financial statements involves the
rearranging, comparing and measuring the significance of financial and operating data.
Balance sheet is the main document to access the financial sound ability of the concern. The
asset details in the balance sheet shall help the investor to decide the investment ideas. The
ratio analysis is the necessary tools to the investors to necessarily select and built an
effective portfolio. The data helps the investor in developing the strategy for effective
investment management.
The future of the company is also looking bright as FMCG market in India is still expanding
and so we can safely conclude that HUL will be able to secure its number one position in
FMCG product.
Chapter 11
BIBLIOGRAPHY
https://en.wikipedia.org/wiki/Hindustan_Unilever
https://www.hul.co.in
https://scholar.google.com
https://www.moneycontrol.com
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A

“PERFORMANCE ANALYSIS OF HINDUSTAN UNILEVER LIMITED”

It is my privilege to express gratitude & sincere thanks to JSPM’s Jayawantrao Sawant

I express sincere thanks to my project guide, Mr./Dr./Ms./Mrs. …, (Designation)…………..

I, Shubham Deshmukh, studying in the second year of Master of Business Administration

Chapter 10 & 11:

Importance of Performance Analysis

Counters: It records either frequencies of events or cumulative times. The insertion of

A trace is processed to produce a histogram giving a distribution of message sizes. Parallel

2.1 Research Objectives:

2.2 Scope of the study:

• This study of “Financial Performance Analysis of Hindustan Unilever Limited” is

3.1 Sector/Industry Profile

3.1.1 What are FMCGs?

3.1.2 The Nature of FMCG are as follows:

3.1.3 Growth Drivers for Indian FMCG Industry:

1. Favourable Government Initiatives & Policy:

5. Growth of E-Commerce Platforms:

3.1.4 Top 10 FMCG Industry Trends:

5. Big Data & Analytics:

3.1.5 Competitive Landscape of FMCG:

3.1.6 What are the FMCG Companies?

Here are the top FMCG companies:

3.1.7 SWOT Analysis of FMCG Industry:

3.2 Company Profile

‘HINDUSTAN UNILEVER LIMITED (HUL) is a household goods company

3.2.1 SWOT ANALYSIS OF HUL:

3.3 Product Profile

5.2 Scope of the study:

5.3 Research Design:

5.4 Research Instrument:

6.1 FINANCIAL RATIOS:

6.1.1 Profitability Ratio:

4. Return on Shareholder’s Equity:

Year Profit after Tax Average Total Return on Assets

2018 5237 15950 32.83

6. Earning Per Share:

3. Working Capital Turnover Ratio:

6.1.3 Liquidity Ratio:

6.1.4 Leverage Ratio:

2. Debt to Total Capital Ratio:

3. Debt to Total Assets Ratio:

5. Interest Coverage Ratio:

6.2 HORIZONTAL ANALYSIS:

Profit & Loss Account:

Comparative Balance Sheet for the year 2017 & 2018:

Comparative Balance Sheet for the year 2018 & 2019:

Comparative Balance Sheet for the year 2019 & 2020:

Comparative Balance Sheet for the year 2020 & 2021:

Comparative Balance Sheet for the year 2021 & 2022:

Interpretation of Balance Sheet:

6.3 TREND ANALYSIS:

Profit & Loss Account:

Interpretation of Balance Sheet:

6.4 VERTICAL ANALYSIS:

Profit & Loss Account:

Interpretation of P&L Account:

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