A probable downtrend in consumer demand during the period has, however, arrested the company's topline growth from soaring at a double-digit level, said analysts.

Reacting positively to the results, the HLL scrip on the BSE closed at Rs 2,430 against Tuesday's close of Rs 2,280, a gain of Rs 150. The scrip opened on Wednesday at a low of Rs 2,290 to touch a high of Rs 2,462 before closing at Rs 2,430. Volumes traded increased substantially to 2.77 lakh shares on Wednesday against 97,000 shares on the previous day.

Commenting on the nine-month results, HLL chairman KB Dadiseth said: "The domestic market for our portfolio continues to be affected by consumer downtrading, impacting the unit value of realisation. HLL continues to focus on distribution and consumer relevant innovations and has been able to achieve good levels of volumes growth in its home and personal care and food portfolios, with the exception of tea and icecream." Food categories, excluding tea and oils and fats, increased sales overall by 15.4 per cent with strong growth in branded staples and coffee.

Net sales during the period witnessed a 7.1 per cent growth to Rs 7,645.31 crore compared with Rs 7,138.21 crore last year. Earnings per share have grown by 25.8 per cent to Rs 44.01 per share compared with Rs 35 in the same period last year.

A royalty charge of Rs 4.90 crore to Unilever during the third quarter ended September 1999, has resulted in a higher total expenditure of Rs 2,120.90 crore against Rs 1,975.88 crore in the same period last year. HLL has entered into a technical collaboration agreement with Unilever effective September 1, 1999, for paying royalty at the approved rate of 1 per cent (net of tax) on sales of specified products. The royalty payment for September has been factored in the third-quarter result.

As a result, operating profit during the third quarter has climbed up marginally by 4.5 per cent to Rs 330.69 crore from Rs 316.32 crore in the corresponding period last year. Operating profit margins in the third quarter have been impacted with a marginal decline to 13.5 per cent from 13.8 per cent last year. Net margins have, however, improved to 11.63 per cent from 9.74 per cent in the same period last year.

Total expenditure in the nine-month period ended September 1999, was up 6.45 per cent to Rs 6,774.17 crore, up from Rs 6,363.13 crore in the corresponding period last year.

Operating profit has risen 12.39 per cent to Rs 871.14 crore during the nine-month period from Rs 775.08 crore last year. Operating margins during the period have risen to 11.39 per cent from 10.85 per cent, while net profit margins have gone up to 9.5 per cent from 8 per cent last year.

Interest costs have come down to Rs 17.4 crore from Rs 24.55 crore. Depreciation was higher at Rs 101.56 crore from Rs 80.42 crore while the provision for taxation at Rs 231.80 crore up from Rs 223.79 crore.

During the third quarter ended September 1999, net profit grew 27.7 per cent to Rs 285.2 crore from Rs 223.37 crore in the same period last year. Turnover witnessed a 7 per cent growth to Rs 2,451.59 crore from Rs 2,292.20 crore last year.

The net profit level is higher at 27.7 per cent due to exceptional item charge of Rs 12.93 crore in second quarter of 1998 on account of stamp duty on merger of Pond's India.

Other income at Rs 78.14 crore during the third quarter period (Rs 142.92 crore plast year) factors the disposal of the dairy business at a consideration of Rs 5.20 lakh.

The growth-drivers have been the traditional businesses of soaps and detergents (11 per cent), and personal products (21 per cent), while the new businesses of branded staples recorded a 75 per cent growth. Icecreams and culinary grew modestly at 7 per cent each, while animal feeds and seeds posted a growth of 26 per cent and 43 per cent.

The company said that the oils and fats business grew in volume but suffered a decline in sales realisation to the extent of 10 per cent due to significantly lower commodity oil prices and bearish market conditions resulting in de-stocking by trade.

On the domestic packet tea business, the company said that it is expected to post a recovery considering that the discriminatory excise levy has been withdrawn. Exports (Rs 1,385 crore turnover in first nine month period) continue to be under pressure. However, the company said it has taken steps to enter new markets and strengthen presence in Europe and North America.