FMCG major Hindustan Unilever has posted a 7 per cent increase in its standalone net profit at Rs 1,089.59 crore for the three months ended March 2016 as against a net profit of Rs 1,018.08 crore in the same period of last year.
HUL’s net sales during the quarter were up 3.36 per cent to Rs 7,809.40 crore as against Rs 7,555.00 crore in the year-ago period. For the year ended March 2016, HUL’s consolidated net profit was down 6.43 per cent to Rs 4,082.42 crore as against a net profit of Rs 4,363.08 crore last fiscal. Consolidated net sales for FY 2015-16 increased 4.11 per cent to Rs 32,482.72 crore as against Rs 31,199.72 crore a year ago.
HUL shares declined 0.80 per cent to Rs 846.10 on the BSE on Monday.
“In challenging markets and a deflationary cost environment, we have delivered another year of competitive and profitable growth. The consistency of our performance is a result of managing our business dynamically, and executing our strategy with even greater rigour and discipline,” HUL chairman Harish Manwani said. During the quarter under review, the company said its domestic consumer business grew at 4 per cent. Growth was, however, impacted by the phasing out of excise duty incentives, a one-time credit for excise duty refund in the base quarter and marginal price de-growth.
Ravi Shenoy, vice-0president, Motilal Oswal Securities, said, “Volume growth reflects the increased competition in the industry from entry of a new player as well as stress from two consecutive years of poor monsoon.” “We believe that in the coming quarters, gross margin gains will have relatively lower visibility (certain raw material prices rising), and advertising and promotion expenses will be dependent on competitive intensity. As such, we believe that revenue growth will be the primary (and reliable) factor driving earnings growth. In this context, HUL’s weak revenue growth — particularly growth in personal products — is worth pointing as a negative,” said Ritwik Rai, Analyst, Kotak Securities
During the quarter, revenue from soaps and detergents segment was up 2.14 per cent at Rs 3,752.50 crore, as against Rs 3,673.71 crore a year ago. “The quarter witnessed price deflation in this segment, albeit at lower levels, arising from actions taken earlier to pass on the benefit of lower commodity costs to consumers,” HUL said. HUL’s revenue from personal products was up 2.78 per cent at Rs 2,312.42 crore during the fourth quarter, as against Rs 2,249.68 crore in the same period of 2014-15.