CENTURY ENKA-Poor Sales

EPW Research Foundation HINDUSTAN LEVER Profitable Growth HINDUSTAN LEVER (HLL), a subsidiary of Unilever has continued to make strides as a consumer product giant in India, with the company's performance getting augmented in the second half of 1993 when revival of consumer demand which was linked to yet another good monsoon began to pick up. The company's net sales have shown an increase of 16 per cent in 1993 with operating profit going up by 25 per cent and net profits by 29 per cent. In a situation of competition, HLL has hiked its commission on sales, which is reflected in its expenditure on sales jumping by 44 per cent for the year under review. A decrease in the company's interest burden was offset by increases in depreciation and tax provisions. The company has announced a dividend of 56 per cent for the year raising it from 42 per cent in the previous year. What is impressive is the HLL's ability to generate probably the best of the Indian corporate sector's profitability ratios : 23 per cent of return on investemnt (gross profit to total assets) or 33 per cent of return on equity capital (profit after tax on net worth). The company's sales to total assets ratio increased marginally by 2 percentage point, while its sales to gross fixed asset ratio went up by 96 percentage points from 469 per cent in 1992 to 565 percent in 1993.