Despite headwinds, HUL first quarter net rises 15 p.c.

Employee benefit expense for the quarter includes a one-time credit of Rs.32.44 crore on account of adjustments for unutilised pension corpus relating to earlier years.

Harish Manwani, Chairman Hindustan Unilever Ltd., said “While we are seeing headwinds on market growth, consumer spending and inflation, we remain focussed on managing the business for long-term competitive and profitable growth and implementing our strategy with even greater rigour.” HUL on Monday reported a 15.21 per cent growth in its net profit for the quarter ended June 30, 2014, at Rs.1,019.68 crore. File photo: Mohammed Yousuf

Fast moving consumer goods (FMCG) giant Hindustan Unilever Ltd. (HUL) on Monday reported a 15.21 per cent growth in its net profit for the quarter ended June 30, 2014, at Rs.1,019.68 crore. Net sales rose by 13.2 per cent to Rs.7,570.8 crore while its operating profit was up 22.6 per cent at Rs.1,249.8 crore.

During the period, HUL’s domestic FMCG business grew 13 per cent with an underlying volume growth of 6 per cent. Employee benefit expense for the quarter includes a one-time credit of Rs.32.44 crore on account of adjustments for unutilised pension corpus relating to earlier years.

According to a company release, the operating environment remained challenging with market growth further slowing down.

However, all segments saw double-digit growth with soaps and detergents seeing broad-based double-digit growth. It reported sales of Rs.3,847.5 crore, personal products’ sales grew to Rs.2,159.5 crore, beverages grew to Rs.836.56 crore and packaged foods to Rs.543.78 crore.

“The overall competitive activity remained high despite the lower media intensity in the quarter,” HUL said adding that investments were sustained at competitive levels as absolute advertising and promotion (A&P) spends increased by Rs.55 crore.

“We continue to grow ahead of our markets and have delivered another quarter of strong top and bottom-line performance,” Harish Manwani, Chairman, said in a statement. “While we are seeing headwinds on market growth, consumer spending and inflation, we remain focussed on managing the business for long-term competitive and profitable growth and implementing our strategy with even greater rigour.”

Analysts felt the results exceeded expectations and HUL had performed better than its peers in the FMCG industry. According to Ritwik Rai, FMCG analyst, Kotak Securities, “HUL’s results are ahead of our expectations on top-line as well as bottom-line. Volume growth has come in stronger than recent quarters and the company has continued to gain from higher realisations.”

On the Bombay Stock Exchange, the HUL stock rose smartly to gain 3.69 per cent and close trading on Monday at Rs.686.45.