FMCG major Hindustan Unilever on Friday met analyst estimates as it reported a 17% rise in net profit during the January-March quarter at Rs 1,018 crore, led by growth in volumes and an exceptional income from sale of property. It sold its wholly-owned subsidiary, Brooke Bond Real Estate, for Rs 168 crore.
Net sales increased to Rs 7,555 crore, up from Rs 6,936 crore during the same period last year. The domestic consumer business grew 9% with 6% underlying volume growth, both ahead of market expecations. Operating profit stood at Rs 1,247.66 crore, a rise of 23.3% from last year.
For FY15, net profit increased 12% to Rs 4,315 crore. Net sales stood at Rs 30,170.50 crore, compared to Rs 27,408.29 crore in FY14. “The strong track of cash generation was sustained as cash from operations exceeded Rs 5,000 crore for yet another year,” the company said in a press release.
In FY15, the company’s net sales crossed Rs 30,000 crore for the first time.
In January-March, the company spent Rs 1,027 crore on advertising and promotions compared to Rs 840.34 crore last year. The annual spend was Rs 3,874.94 crore.
Input costs were benign and this reflected in the 310-bps reduction in the cost of goods, the company said. “Our long-term growth rate will be higher. Rural consumption is growing faster than urban consumption as penetration is low in rural areas of the country” said Harish Manwani, chairman of HUL.
HUL cut prices by 5-6% across categories during the quarter due to a fall in commodity prices. Going ahead, the company said it will closely watch commodity prices before any further decisions on pricing.
Revenue from the soap and detergent segment in March quarter stood at Rs 3,673.71 crore, personal products Rs 2,249.68 crore, beverages Rs 976.15 crore while packaged foods clocked Rs 294 crore.
In foods, the FMCG major saw double-digit growth across key brands. Kissan sustained its strong activation-led growth momentum while Knorr registered volume-led growth as sales of instant soups more than doubled.