HUL Q3 net profit grows 9% to Rs 1,444 crore on volume growth

Sales during the quarter under review stood at Rs 9,357 crore, up 12.42 per cent, as against Rs 8,323 crore in the corresponding period of the last fiscal.

FMCG major Hindustan Unilever (HUL) on Thursday reported a 9 per cent increase in its net profit to Rs 1,444 crore for the December 2018 quarter on account of strong volume growth and improved margins.

The company's net profit stood at Rs 1,326 crore in the October-December period of the previous fiscal.

Sales during the quarter under review stood at Rs 9,357 crore, up 12.42 per cent, as against Rs 8,323 crore in the corresponding period of the last fiscal, HUL said in a regulatory filing.

"Domestic consumer growth was 13 per cent with underlying volume growth at 10 per cent. EBITDA margin (earnings before interest, tax, depreciation and amortisation) was up 170 basis points and profit after tax (before exceptional items) grew by 17 per cent," HUL said in a statement.

"Prudent management of volatility in costs (crude and currency led) along with improved mix and operating leverage has driven margin improvement," the company said.

HUL chairman and managing director Sanjiv Mehta said the company has achieved  another strong performance in the last quarter with double digit volume growth and improvement in margins.

"Our focus on strengthening the core and leading market development by tapping into emerging trends has been yielding results across categories," he said.

Its total expenses during the quarter under review were at Rs 7,652 crore as against Rs 7,036 crore, up 8.75 per cent.

HUL's revenue from the home care segment was at Rs 3,148 crore, up 14.84 per cent, during the quarter under review as against Rs 2,741 crore in the corresponding period a year ago.

"Home care continued its impressive performance with both fabric wash and household care delivering double-digit growth," said HUL adding growth momentum in household care continued with increased penetration of bars in rural markets.

While contribution from the beauty and personal care segment was up 10.9 per cent to Rs 4,539 crore during the October-December period this fiscal as against Rs 4,090 crore a year ago.

"Personal wash growth continued to be driven by premiumisation of the portfolio. Skin care witnessed excellent growth enabled by stellar execution of winter portfolio," HUL said, adding that hair care also continued to perform strongly.

Its foods and refreshment segment was also up 9.92 per cent during the period to Rs 1,728 crore as against Rs 1,572 crore of Q3/FY 2017-18.

However, its 'other' segment, which includes, exports, infant and feminine care was down 23.52 per cent to Rs 143 crore as against Rs 187 crore in the corresponding quarter a year ago.

Over the outlook, Mehta said: "In the near term, demand is likely to be stable. We will keep a close watch on the macro-economic environment and respond with agility. We remain focused on our strategic agenda of delivering Consistent, Competitive, Profitable and Responsible growth."

Updating HUL's scheme of merger with GlaxoSmithKline Consumer Healthcare (GSKCH India) through an-all equity deal, the FMCG major said it is in process of getting necessary approvals from various authorities.

"The company is in the process of seeking requisite approvals/ no objections from stock exchanges and the Competition Commission of India (CCI) in this regard," said HUL.

Shares of HUL settled at Rs 1,750.10 apiece on the BSE, down 1.12 per cent from their previous close.

Photograph: Danish Siddiqui/Reuters