FMCG major Hindustan Unilever (HUL) on Monday reported a 11% jump in standalone net profit at R872.13 crore in the fourth quarter of FY14.
A year ago, the company had reported a profit of R787.20 crore in the March quarter.
Volumes grew was subdued at 3% y-o-y and revenues rose 10% y-o-y at R7,094 crore indicating the company?s dependence on price hikes.
Spending on advertisements as a percentage of sales was down 11.8% in the fourth quarter of FY14 compared with 12.7% in March quarter of FY13, and 11.2% in the third quarter of FY14.
With rural spending contributing approximately 50% of the HUL topline, a weak monsoon may affect company sales, caution analysts.
The management is cautious in its outlook, pointing towards the slowdown that has put pressure on sales of some categories.
HUL chief financial officer R Sridhar said, ?In the quarter, our domestic consumer business grew 9%. Our operating margin expanded 30 basis points with operating profit up 11%.?
FMCG analyst with Kotak Securities Ritwik Rai said that HUL revenues were broadly on expected lines with a 3% growth in sales volume. ?Ebitda at 4% is above our expectations and comes on back of lower-than-expected input expenses, and lower-than-expected advertising and promotions (A&P) expenses (barely 2% y-o-y growth),? he added.
The revenue from soap and detergents rose 9.57% to R3,497.12 crore and personal products rose 8.31% to R1,983.29 crore. Revenue from beverages grew 7.54% to R869 crore and packaged food rose 12.71% to R419.68 crore,? said Sridhar. HUL?s overall expenses in Q4 stood at R6,082.32 crore as against R5,555.46 crore in the year-ago period.
The company’s board of directors has declared a dividend of R7.50 per equity share of face value of R1 each for FY14.