Anglo-Dutch toileteries and foods major Hindustan Lever has received another drubbing in the market, going by its third quarter results.

Asked how much longer HLL's financial results would continue to tumble, HLL vice-chairman M K Sharma retorted: "Let me be blunt. Ask P&G."

That's because, in the last one year, a rejuvenated Procter & Gamble, which slashed the prices of its detergents and shampoos, has been taking the wind out of HLL's sails. By cutting the prices of its Ariel and Tide detergents, P&G got HLL to do the same with its Surf and Rin brands.

The FMCG major today reported a 26.9 per cent drop in its net profit at Rs 324.32 crore (Rs 3.24 billion) for the quarter ended September 2004, down from Rs 443.22 crore (Rs 4.43 billion) in the corresponding period of last year.

With this, HLL now has recorded decline in net profit for five consecutive quarters. The drop in topline has been for four quarters in a row.

This also came at a time when HLL's other categories -- hair care and oral care -- were under similar pressures from both the premium and low-end players.

Said S P Mustapha, vice president, treasurey, M&A & investor relations at HLL, "There are competitive pressures building up in the laundry segment both at the top end and the middle segment where our Rin operates. This may see prices move up." He however ruled out any price cut in the shampoo segment for the time being.

Sharma, in comparison, was more blunt in his approach to business strategy. He refused to make any forward looking statement but said: "We are hired by the shareholders to do the right things and we will do whatever is right for the company."

On being asked how long it will take the multinational to come back to the growth path both in topline and bottomline, Sharma response was candid.

"We will not cede one inch to competition. This is unblinking defence. We will do whatever needs to be done to maintain and grow our market share," he said passionately.

So, it is clear that HLL may not initiate a price hike or a cut. It will wait for P&G to make the first move and will then react to it.

For the record, the revenues of the soaps and detergents segment in the quarter rose by 3.79 per cent. The personal products segment, which partly reflects the price war in shampoos, saw profit margin declining by 1.5 percentage points, while sales of the segment were flat at Rs 291 crore (Rs 2.91 billion).

The company has managed to maintain its volume market share in the laundry business at around 25.5 per cent. In the shampoo segment too, it has increased its volume market share to 51.7 per cent last quarter, compared to 49.4 per cent in the June quarter.

Its foods business continues to bleed. At one time, HLL was talking of wanting to be in sync with parent Unilever with foods accounting for half its turnover. But with plans consistently going awry, Sharma said, "We are not projecting anything."

Already, it has reduced the number of stock keeping units in the culinary range. Its packaged atta (flour) and salt are not spicing up the market and are now sold in only few geographies. "Efforts are on to consolidate the business by looking at supply chain efficiencies," said Mustapha.

Modern Foods which HLL acquired three four years ago, as part of the government's first ever outright sale of a public sector undertaking, is still to earn its bread.