FMCG major Hindustan Unilever (HUL) on Saturday reported a 13.24% increase in standalone net profit at R913.8 crore for the second quarter ended September. The company had posted a net profit of R806.92 crore in the corresponding quarter a year ago.
Net sales of the company climbed to R6,747.2 crore in the quarter, from R6,155.41 crore a year earlier, the company said in a BSE filing.
Talking about the company’s growth strategy, HUL chairman Harish Manwani said, “There’s a pipeline of innovations waiting to be launched at HUL. We have more than doubled our rural coverage in the last few years.”
HUL chief executive Sanjiv Mehta said: “We want to grow ahead of the markets. I want to continue with the good work Nitin Paranjpe has done. Our main goal is to fuel consistent growth.”
Volume growth for the quarter was 5%, marginally higher than the June quarter’s 4%. During the quarter, sales of personal products grew 12% , while beverages grew 16% and packaged goods 9%.
Shares of HUL fell 2.33% to close at R594.20 per share on Friday on the BSE, while Sensex lost 0.2% to close at 20,683.52 points and the BSE FMCG Index lost 0.93% to close at 6,860.19 points.
Better-than-expected performance at the maker of Dove soap and Ponds anti-ageing cream could suggest that consumer sentiment across the country is picking up, Naveen Vyas, Kolkata-based analyst at Microsec Capital, said. “There could be a mild thawing in consumer sentiment,” Vyas said. “Sales of some premium goods may have been better than expected.”
However, Nitin Mathur, consumer research analyst with Espirito Santo Securities, said, “The personal products sales of 12% year-on-year look good considering the macro-economic environment. However, the company was not able to arrest the tapering growth in the soaps and detergents business (6% y-o-y) following pricing deflation. Domestic volume growth of 5% is in line with expectations; however, this comes at the back of significantly increased advertising and sales promotion.”
Analysts had expected a net profit of R870 crore for the quarter, as per Thomson Reuters Starmine Estimates. The board also declared an interim dividend of R5.50 per equity share of face value of R1 each for the fiscal ending March 2014. The dividend will be paid to the shareholders on or after November 15, 2013.
(With inputs from agencies)
* Soaps and detergents registered a 6% growth
* The company’s personal products grew 12%
* Beverages grew 16%; another strong