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Updated January 20th, 2024 at 11:03 IST

Hindustan Unilever Q3 profit rises marginally

Hindustan Unilever's net profit in December quarter came in at Rs 2,519 crore as against Rs 2,505 crore in the same period last year.

Abhishek Vasudev
Hindustan Unilever Q2
Hindustan Unilever Q2 | Image:Hindustan Unilever Limited
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HUL Q3 results: Hindustan Unilever (HUL), the country's largest fast moving consumer goods (FMCG) company, on Friday announced 0.6 per cent rise in quarterly profit, falling below market expectations, as demand for consumer goods in rural areas continued to remain sluggish, primarily impacted by a delayed winter season.

Hindustan Unilever's net profit in December quarter came in at Rs 2,519 crore as against Rs 2,505 crore in the same period last year.

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Analysts, who had anticipated a higher figure, estimated an average profit of Rs 2,680 crore, according to data from LSEG. The subdued performance reflects the persistent challenges in the rural market, stressing the impact of weather-related factors on consumer demand.

The profit miss came as Hindustan Unilever cut prices of several products, including detergents and household care products, on the back of easing commodity prices.

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Its revenue from operations also remained subdued in December quarter as it came in at Rs 15,188 crore, down 0.3 per cent from Rs 15,228 crore in the year ago period.

Operationally, Hindustan Unilever posted a muted numbers as its earnings before interest, taxes, depreciation, and amortisation (EBITDA) also known as operating profit came in at Rs 3,540 crore as against Rs 3,537 crore in the year ago period. Its EBITDA margin flat at 23.7 per cent rising 10 basis points.

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Sectoral performance

Home Care segment

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There was a slight dip in revenue despite witnessing mid-single-digit Unilever Volume Growth (UVG) in the quarter. However, when analysed on a 2-year Compound Annual Growth Rate (CAGR) basis, the business demonstrated robust double-digit growth of 14%, driven by high single-digit UVG.

Fabric Wash

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Volumes saw mid-single-digit year-on-year growth, primarily attributed to the outstanding performance in the premium portfolio. Household care volumes grew in low single digits, led by Dishwash.

Beauty & Personal Care

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The revenue remained steady with mid-single-digit UVG. Skin Cleansing revenue saw a decline due to price reductions aimed at passing on the benefits of lower commodity costs to consumers. Noteworthy results were achieved in bodywash due to strategic market development actions. Despite a winter-related delay impacting skin care performance, the premium non-winter portfolio continued to thrive.

Hair Care

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The segment stood out with double-digit growth driven by volume, showcasing broad-based performance across brands. Oral Care experienced mid-single-digit growth, led by Closeup. Key launches in this quarter included products like Glow & Lovely Powder finish crème, a new active skin barrier care range by Simple, Sunsilk hair serums, Close-up naturals range, and Lakme’s range of makeup products.

In the Foods & Refreshment sector, revenue witnessed 1% growth, primarily driven by price adjustments in the Market Development portfolio. Tea reinforced its position with both value and volume market leadership, while Green Tea and flavored tea showed strong performance. Coffee achieved double-digit growth attributed to pricing strategies. Health Food Drinks delivered modest competitive growth driven by the Plus range. Strong growth continued in Foods Solutions, Mayonnaise, and Peanut Butter. Ice Cream experienced mid-single-digit growth on a high base, the company said in a press release.

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"HUL has delivered another quarter of resilient performance with strong operating fundamentals amidst a challenging operating environment. Our focus on providing the right consumer value, excellence in execution, increased investments behind brands and capabilities, premiumisation and market  development continues to serve us well," Rohit Jawa, CEO and Managing Director commented on December quarter earnings.

"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. In this context, our focus remains on driving competitive volume growth whilst stepping up investment behind our brands and long-term strategic priorities. 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 added.

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Hindustan Unilever shares ended 0.66 per cent higher at Rs 2,564.75 ahead of its earnings announcement.
 

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Published January 19th, 2024 at 16:20 IST

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