Hindustan Unilever Ltd. (HUL) reported a better than expected growth of 22 per cent in net profit at Rs.1,062.3 crore for the third quarter of 2013-14.
Net sales grew 9.4 per cent to Rs.7,038 crore. While domestic FMCG sales were up 9.9 per cent, the home and personal care business rose by 9.9 per cent. And, the food business grew by 10.3 per cent.
The operating profit grew 13 per cent to Rs.1,162.38 crore.
During the quarter, domestic consumer business grew at 10 per cent, ahead of market with 4 per cent underlying volume growth.
According to the company, the operating context during the quarter remained challenging with market growth under pressure, firm input costs given the rupee depreciation, an uncertain media environment, and the high competitive intensity. “Cost inflation was managed through a combination of judicious pricing action, unwinding of promotions and substantial cost savings,” the company said.
The overall advertising and promotion spend during the quarter was up 40 basis points during the quarter by Rs.107 crore.
“Our growth has been competitive and profitable and the results are a reflection of how we dynamically managed the business despite the headwinds in the environment,” Harish Manwani, Chairman, said in a statement. “Looking forward, we are conscious of the uncertain macro context but remain positive on the mid- to long-term opportunities in our sector. We are determined to stay the course on our strategy and will continue to invest in the business for the long term.’’
According to Rikesh Parikh, Vice-President-Institutional Corporate Broking, Motilal Oswal Securities, “Healthy double-digit top line growth in personal products and margin expansion despite high base was a key positive surprise.
The 4 per cent volume growth, though subdued, is competitive given the market context. We expect sales growth to remain muted for the next few quarters at least, stymied by a sluggish economy”.On the Bombay Stock Exchange (BSE), the HUL stock moved up smartly by Rs.9.65 (1.71 per cent) to close the session at Rs.575.55 on Monday.
