Hindustan Unilever Ltd (HUL) has reported a 17.87 per cent rise in standalone net profit at Rs 1,252 crore for the quarter ended December as against Rs 1,062 crore in the same period of last year on the back of reduction in input costs and proceeds from sale of properties.
HUL’s net sales increased by 7.69 per cent to Rs 7,579.18 crore in the third quarter of current fiscal, compared with Rs 7,037.78 crore during the same period of last fiscal. Exceptional income include a Rs 407.29-crore profit from sales of properties during the quarter this fiscal, the company said in a stock exchange filing. HUL shares fell 5.27 per cent at Rs 892.80 on the BSE as the results failed to enthuse the markets.
“The volume growth was soft during the quarter and there was modest pick up in the market. However, input costs have come down shortly due to falling crude prices,” HUL chief financial officer P B Balaji said. Rural sales were picking up higher than in urban areas. The company has a ratio of 60:40 of sales from urban and rural areas.
Moreover, delayed arrival of winter also affected sales of skincare products. “Our emphasis on market development and innovations have helped deliver another quarter of double digit growth and improvement in operating margins,” he said, adding that the market was showing improvements.
Ritwik Rai, FMCG analyst, Kotak Securities, said, “HUL’s results disappointed as the volume growth (3 per cent year-on-year) missed our estimates (5 per cent). The company has reported that its volume and value growth remains ahead of the sector. Gross margins expanded in line with expectations. Excluding one-time provisions in employee expenses, the reported EBITDA came in 5 per cent below our estimates.”