Hindustan Unilever Ltd (HUL) reported net profit of Rs.988 crore for the second quarter ended September 30, 2014, as compared to Rs.914 crore in the same period in the previous year up 8 per cent.
During the period net sales increased to Rs. 7,466 crore as compared to Rs. 6,747 crore in the same period last year.
The directors have declared an interim dividend of Rs. 6 per equity share (face value of Re 1 each) for the year ending March 31, 2015.
The company’s top management said, during the quarter, the operating environment remained challenging with low market growth across categories. Brand investments were sustained at competitive levels across segments.
The impact of rise in input cost continued to be felt during the quarter through higher consumption costs although commodity prices softened towards the end of the quarter, they said.
“In a low growth environment, our emphasis on market development and innovations has helped deliver another quarter of double digit growth and a healthy improvement in operating margins. The consistency of our performance is a reflection of the discipline and rigor with which we are executing our strategy. We will continue to manage our business dynamically for sustained competitive and profitable growth,” said Harish Manwani, Chairman, HUL at a press conference.
During the quarter, the company’s domestic consumer sales grew by 10 per cent ahead of the market which was in negative.
The company reported volume growth of five per cent despite the tight market conditions.
Soaps and detergent business reported double digit growth while in skin care Fair and Lovely and Ponds delivered volume-led double digit growth. In beverages, coffee registered double digit growth. Similarly, the company’s packaged foods and water business also reported double digit growth.
Answering a question on whether market conditions have improved after change in government, HUL Managing Director and CEO Sanjiv Mehta said: “It is too early and we are yet to see clear emerging trend.”
Supplementing this Mr. Manwani said: “We would like to see volume growth but we don’t know what the market is going to be.”
E-commerce strategy
Meanwhile, HUL is also working on its e-commerce strategy. “Globally we recognise that we need to create capabilities in our organisation in e-commerce to be future ready. We have a global dedicated team which is working to bring the best practices in e-commerce and we want to work with our lead partners in this format which can be transformational,” said Mr Manwani.
HUL shares closed with a loss of 4.8 per cent at Rs. 721.90 on the BSE.
