Lever posts 8% growth in profit - Calcutta Telegraph

Mumbai, Oct. 27: Hindustan Unilever Ltd (HUL) today reported an 8 per cent rise in net profit for the second quarter ended September at Rs 988.16 crore compared with Rs 913.80 crore in the corresponding period of the previous fiscal.

The company had to battle low market growth across categories and a rise in input costs. The FMCG company said the impact of input cost inflation was reflected in higher consumption costs though commodity prices softened towards the end of the three-month period.

Advertising and promotion-related expenses came down to Rs 925.05 crore from Rs 954.02 crore in the year-ago period and there was a 50-basis-point increase in margins. Domestic FMCG sales rose to Rs 7,132.69 crore (Rs 6,459.47 crore).

“In a low-growth environment, our emphasis on market development and innovations have helped to deliver another quarter of double-digit growth and a healthy improvement in operating margins. The consistency of our performance is a reflection of the discipline and rigour with which we are executing our strategy. We will continue to manage our business dynamically for sustained competitive and profitable growth,” chairman Harish Manwani said.

Soaps and detergents witnessed double-digit broad-based growth. In skin cleansing, growth was driven by Lifebuoy, Lux and Dove. In laundry, Surf sustained its strong momentum.

Growth was also seen in the personal products category with brands such as Fair and Lovely and Pond’s posting double-digit volume growth.

Revenues from home & personal care rose to Rs 5,800.46 crore (Rs 5,242.01 crore), while earnings from the foods business was placed higher at Rs 1,332.23 crore.

On the BSE, the HUL stock finished lower 4.75 per cent, or Rs 36, at Rs 721.90 today.

Market circles attributed this to a disappointing 5 per cent volume growth against 6 per cent in the preceding quarter.

Indications of a challenging market for FMCG in the short term by the management also led to investors selling the stock. HUL has recommended an interim dividend of Rs 6 per share.