HLL Q1 net profit at Rs 443 crore

Mumbai, April 28 | Updated: Apr 29 2006, 05:30am hrs
Indias largest FMCG company Hindustan Lever Ltd (HLL) on Friday said it posted a net profit of Rs 442.86 crore for the first quarter ended March 31, 2006, compared to Rs 250.2 crore in the same period of the previous fiscal, on the back of an 18% growth in the FMCG segment, and a robust 11% growth in rural demand. Net sales for the period stood at Rs 2,798.05 crore compared to Rs 2,506.38 crore last year. The results are not strictly comparable since HLL integrated a number of its subsidiaries with itself last year.

The companys total sales grew by 11.6%, while sales growth in domestic FMCG businesses accelerated to 18.3%. Its HPC (home & personal care) business grew by 20%, while its foods business has registered only a 11 % growth.

Industry analysts said HLLs results were in line with expectations. "Strong growth in personal care business has made a major contribution to the companys top line and profit growth. This trend will continue in the next quarter too," analysts said.

Harish Manwani, chairman, HLL said, "We will continue to judiciously use the levers of pricing, cost management and brand investment to sustain profitable growth." According to D Sundaram, finance director, input cost pressure continued during the quarter led by crude oil price escalation.

"The impact of selective price increases, improved sales mix and cost savings resulted in a higher gross margin. This margin increase was re-deployed in brand investments for driving sales growth. "The companys A&P (advertising and promotions) spend for the quarter recorded a 45% increase.