HUL Q3 net rises by 18.68pc to Rs 2,300cr; net sales up 10.25 pc to Rs 13,196 cr

Major FMCG Hindustan Unilever Ltd On Thursday reported an 18.68% rise in consolidated net profit to Rs 2,300 crore for the third quarter ended December 2021, helped by volume-led growth and ‘beautiful market share gains’ in all divisions in a context of high inflation affecting demand, particularly in the rural market.

The company had recorded a net profit of Rs 1,938 crore during the October-December period of the previous financial year.

Sales revenue in the quarter under review was Rs 13,196 crore, up 10.25%, compared to Rs 11,969 crore for the corresponding period a year ago, Hindustan Unilever Ltd (HUL) said in a regulatory filing.

HUL’s total expenditure was Rs 10,329 crore in the third quarter of FY 2021-22, up 8.18% from Rs 9,548 crore earlier.

”The fundamentals of the business remained solid with good market share gains across all of our divisions, in both urban and rural markets and in all price segments. Underlying volume growth at 2% was significantly ahead of the market,” HUL said in a post-earnings statement.

In the October-December quarter, HUL’s EBITDA margin at 25.4% improved 100 basis points (bps) year-on-year.

Like other FMCG companies, HUL also faced inflationary headwinds and opted for a calibrated price increase during the quarter.

”In the context of unprecedented inflation, we continue to manage our business dynamically by generating more savings in all lines of Profit & Loss and taking calibrated pricing measures using the principles of Net Revenue Management. We continue to invest competitively behind our brands,” HUL said. HUL CMD Sanjiv Mehta said the company delivered a “strong and resilient” performance in the quarter despite the “moderation” in market growth and significant levels of commodity inflation.

”I am particularly pleased that the growth is extremely competitive, with our market share gains being the highest in over a decade. Our performance reflects our strategic clarity, the strength of our brands, operational excellence and the dynamic financial management of our business,” he said.

However, he added that in the short term, the operating environment will remain difficult.

“In this scenario, we will manage our business with agility, continue to grow our consumer franchise while keeping our margins within a healthy range. We remain confident in the medium to long-term potential of India’s FMCG sector and in HUL’s ability to deliver consistent, competitive, profitable and responsible growth,” Mehta added.

During the quarter, HUL’s revenue from the home care segment increased by 22.97% to Rs 4,192 crore from Rs 3,409 crore in the third quarter of FY 2020-21.

“Homecare growth of 23% was broad-based, with strong performance in fabric washing and household care. Fabric Wash delivered strong double-digit growth, with all parts of the portfolio performing well. Household Care maintained its robust performance and progressed into teens on a solid footing,” HUL said. Calibrated price increases were taken in the fabric washing and housekeeping portfolios to partly offset significant inflation in input costs, he added. Revenue from the beauty and personal care segment increased by 7.08% to Rs 5,213 crore from Rs 4,868 crore, driven by skin cleansing, skin care and color cosmetics.

”Skin Cleansing recorded double-digit growth thanks to the strong performance of ‘Lux’, ‘Dove’ and ‘Pears’. Hair Care had a stable quarter driven by strong performance from the premium portfolio,” HUL said.

A calibrated price increase in the skin cleansing and hair care segment also helped protect the business model, even as vegetable oil prices continued to rise to record highs.

“Together, skincare and color cosmetics recorded double-digit growth and are above pre-COVID levels,” HUL said. Food and refreshments revenue rose 3.27% to Rs 3,466 crore from Rs 3,356 crore earlier, helped by strong performance in the tea and ice cream sector.

”Tea continued its strong performance and grew competitively on a solid foundation with a high 2-year CAGR. The focus on developing the diet drinks market has resulted in significant gains in market share and penetration. “Ice Creams had a very strong quarter with a 2-year CAGR in teens, driven by impactful innovations and effective activations,” HUL said. Its food segment has developed on a solid basis, driven by jams and ketchup. Revenue from the “others” segment, which includes exports, shipments, etc., increased by 3.65% to Rs 568 crore from Rs 548 crore in the third quarter of FY 2020-21.

Shares of HUL stood at Rs 2,261.60 on BSE on Thursday, down 2.13% from the previous close.

(This story has not been edited by the Devdiscourse team and is auto-generated from a syndicated feed.)

Ann J. Cox