HUL Q3 net profit rises 1%, sales down marginally

Hindustan Unilever Ltd on Friday reported a 1.08 per cent increase in consolidated net profit at Rs 2,508 crore in the third quarter ended December 2023.

The company had posted a consolidated net profit of Rs 2,481 crore in the same quarter last fiscal, Hindustan Unilever Ltd (HUL) said in a regulatory filing.

Its revenue from sales of products was marginally down to Rs 15,259 crore during the quarter.

It stood at Rs 15,314 crore in the year-ago period.

HUL's total expenses in the December quarter was marginally higher at Rs 12,305 crore.

Its consolidated total income went up marginally by 0.47 per cent to Rs 15,781 crore in the quarter under review, as compared to Rs 15,707 crore in the year-ago period, the company said.'

In the December quarter, home care and beauty & personal care which constitutes about 75 per cent of its business "continues to see volume recovery" and had mid-single digit underlying volume growth (UVG).

In the foods & refreshment segment, the company had a low single-digit decline in UVG primarily due to pricing action taken in the year to offset impact of higher commodity cost.

On the margin front, HUL's EBITDA stood at 23.7 per cent in the December quarter, which was 10 basis point (bps) higher versus the number recorded in the third quarter of FY23.

"Gross margin and A&P (advertising and promotions) investments increased 400 bps and 270 bps respectively versus DQ'22 (December quarter).

"We continue to manage our business dynamically by ensuring right price-value equation and investing competitively behind our brands and long-term capabilities," it said.

During the quarter, HUL's revenue from home care segment, in which it has brands as Rin, Surf Excel, Vim and Wheel, was down 1.26 per cent to Rs 5,444 crore.

It was at Rs 5,514 crore a year ago.

"However, on a two-year CAGR basis, the business delivered a strong double-digit growth of 14 per cent with high single-digit UVG. Fabric wash volumes grew in mid-single digit YoY driven by outperformance in premium portfolio.

"Household care volumes grew in low single-digit led by dishwash," it said.

Similarly, its revenue from beauty & personal care was flat to Rs 5,782 crore.

The figure was at Rs 5,764 crore in Q3 FY'23.

"Skin cleansing revenue declined due to the impact of price reductions taken to pass on the benefits of lower commodity costs to consumers.

"Market development actions in bodywash continue to yield good results," said HUL which operates in the beauty & personal care segment with brands such as Lux, Pond's, Lakme, Clinic Plus, Dove, Pears, Sunsil and Fair & Lovely.

While delayed winter impacted skin care performance in the quarter, premium non-winter portfolio continued to do well.

"Hair care delivered volume led double-digit growth with broad based performance across brands and future formats continuing to gain traction. Oral care grew mid-single digit led by Closeup," it said.

Besides, in the foods & refreshment segment, HUL had a marginal growth of 0.89 per cent to Rs 3,733 crore as against Rs 3,700 crore a year ago.

"Tea further strengthened value and volume market leadership.

"Green tea and flavoured tea performed well.

"Coffee grew in double digits driven by pricing. Health food drinks delivered competitive modest price-led growth driven by plus range," it said.

Foods solutions, mayonnaise and peanut butter continued to clock strong growths, while ice cream grew in mid-single digit on a high base.

Revenue from other segments which include exports, consignment, etc. was also down 1.77 per cent to Rs 608 crore.

Commenting over the performance, the company's CEO & MD Rohit Jawa said HUL delivered another quarter of resilient performance with strong operating fundamentals amidst a challenging operating environment.

"Looking forward we expect gradual recovery in market demand to continue aided by increased government spending, recovery in winter crop sowing and better crop realization.

"Rural income growths and winter crop yields are key factors that will determine the pace of recovery," he said.

HUL's  focus remains on driving competitive volume growth whilst stepping up investment behind brands.

"We remain confident of the mid to long term potential of Indian FMCG sector and HUL remains well positioned to unlock this opportunity whilst navigating the short-term challenges," he said.

Shares of Hindustan Unilever Ltd on Friday settled at Rs 2,564.75 at BSE, up 0.66 per cent from previous close.