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A strong show in major businesses, especially in the rural markets, helped FMCG giant Hindustan Unilever (HUL) today report 13.24 per cent rise in net profit at Rs 913.8 crore in the September quarter, up from Rs 806.92 crore a year ago.
During the quarter, the company logged net sales of Rs 6,747.2 crore up from Rs 6,155.41 crore.
The company, which sells brands like Lux, Dove, Rin and Surf among others, said it has seen a growth of 10 per cent in revenue terms in its domestic consumer business with underlying volume growth of 5 per cent.
The market growth for the industry is in mid single-digit in revenue terms and the volume growth is very low, the company said.
"We have been talking about slowdown in the market growth and that has continued in this quarter, both in volume growth as well as in value," HUL Chief Financial Officer R Sridhar told reporters this evening.
Analysts said the company's September quarter earnings are marginally ahead of expectations.
Kotak Securities FMCG Analyst Ritwik Rai said: "HUL's 2QFY14 revenues as well as profits have come in modestly ahead of our expectations. Underlying volume growth at 5 per cent, is likely ahead of the industry growth."
During the quarter, HUL's advertising and promotional spends stood at Rs 954.02 crore, up from Rs 768.98 crore in the year-ago period.
With the general slowdown, and with people curtailing their discretionary spends, the segments in higher price points were impacted during the quarter, Sridhar said.
"In particular, premium segments, discretionary categories were sort of impacted much more and they continue to be under pressure. Input cost environment was volatile, further aggravated by the sharp depreciation of the rupee.
"Competitive intensity has actually stepped up in this quarter. We have seen some big competitive launches, but more importantly we have seen a big step up in the industry spends on the media.
"Media gross rating points have gone up significantly especially in personal products category and notably in oral care," the HUL CFO said.
He further said the company is seeing competitive intensity across all product categories.
Meanwhile, the company's Board of Directors today declared an interim dividend of Rs 5.50 per equity share of face value of Re 1 each for the fiscal year ending March 2014.
Additionally, they approved an additional investment in the equity shares of Bhavishya Alliance Child Nutrition Initiatives, a Section 25 Company, to make it a wholly owned subsidiary.