Updated January 20th, 2024 at 11:37 IST

Hindustan Unilever shares under pressure after weak December quarter results

The profit for the quarter increased marginally to Rs 2,519 crore, falling short of market projections.

Reported by: Tanmay Tiwary
Hindustan Unilever Limited | Image:Hindustan Unilever Limited
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HUL shares drop: Shares of Hindustan Unilever Limited (HUL) dropped as much as 3.20 per cent to reach an intraday low of Rs 2,482.50 per share, following the company's announcement of a weaker-than-expected financial result for the December quarter. 

The profit for the quarter increased marginally to Rs 2,519 crore, falling short of market projections. This dip in performance was attributed to sluggish demand for consumer goods in rural areas, primarily affected by a delayed winter season.

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HUL's net profit for the same quarter in the previous year stood at Rs 2,505 crore. The company responded to easing commodity prices by reducing prices on various products, including detergents and household care items. Despite these adjustments, the revenue from operations remained subdued at Rs 15,188 crore, down 0.3 per cent from Rs 15,228 crore in the corresponding period last year.

Operationally, HUL reported muted numbers, with the earnings before interest, taxes, depreciation, and amortisation (EBITDA), also known as operating profit, soared to Rs 3,540 crore, compared to Rs 3,537 crore in the previous year. The EBITDA margin remained flat at 23.7 per cent, showing a 10 basis points (bps) increase.

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In terms of sectoral performance, the Home Care segment experienced a slight dip in revenue despite mid-single-digit Unilever Volume Growth (UVG). 

Fabric Wash volumes saw mid-single-digit year-on-year growth, driven by the premium portfolio. Beauty & Personal Care maintained steady revenue with mid-single-digit UVG, while Hair Care stood out with double-digit growth. 

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The Foods & Refreshment sector witnessed 1% growth, driven by price adjustments in the Market Development portfolio.

Rohit Jawa, CEO and Managing Director of HUL, commented on the company's performance, noting a resilient quarter amidst a challenging environment. He expressed confidence in the gradual recovery of market demand, citing factors such as increased government spending, recovery in winter crop sowing, and better crop realisation. 

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Jawa stressed upon d the company's focus on competitive volume growth, brand investment, and long-term strategic priorities.

At 11:09 am, shares of HUL were trading 2.47 per cent lower at Rs 2,485 per share.

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Published January 20th, 2024 at 11:13 IST