Hindustan Unilever Ltd. (HUL) has registered a double-digit growth in sales in the third quarter of the current financial year even as the net profit rose almost 9%.
For the quarter ended December 31, HUL reported a net profit of ₹1,444 crore as against ₹1,326 crore in the corresponding quarter of the previous fiscal.
Incidentally, restructuring of the water purifier business along with costs attached to the deal with GlaxoSmithKline Consumer Healthcare during the quarter affected the bottomline of the company as the net profit before exceptional items rose 17% in the three-month period ended December 31. Sales grew to ₹9,357 crore in the quarter, up a little over 12% compared to ₹8,323 crore in the corresponding quarter of 2017-18.
While domestic growth rose 13%, the underlying volume growth was pegged at 10% with EBITDA margin up 170 basis points. “The demand remains stable,” said Sanjiv Mehta, chairman and managing director, HUL.
“The overall market grew 9-10% with volume growing 8-9% on a moving annual basis... We are very pleased with the way the market has shaped,” he added.
Addressing the media, Mr. Mehta said that the rural growth was still growing at 1.3 times that of urban. He, however, hinted at challenges in the rural market while highlighting the fact that the government was forced to waive farm loans. “Even rains started well but many pockets in the country didn’t receive average rainfall. The important factor is wage rates because not all are farm owners and wage rates have to move up to have more money in the hands of farmers... I would want the stable scenario to continue,” he said.
Home care grows 15%
Among the three segments of the business, the home care business grew almost 15% to ₹3,148 crore. Further, the third quarter saw the personal care and foods business growing at nearly 11% and 10% respectively.
“HUL Q3FY19 results were largely in-line with expectation, with revenues growing in double digit and PAT growing in high teens,” said Kaustubh Pawaskar, research analyst, Sharekhan.“The third quarter was the fifth consecutive quarter of double-digit volume growth on the back of stable demand in the domestic market. We expect the double digit-earning growth momentum to sustain in the coming quarters with domestic volume growth at 8-10%. The acquisition of GSK Consumers’ HFD (health food drink) business will add value to HUL’s foods business in long run.”
