Announcing the results, PB Balaji, chief financial officer of HUL, said,"During the quarter, domestic consumer business grew at 10% ahead of markets with 5% underlying volume growth. Our operating profit is up by 16% at R1,166 crore.
According to him, demand for FMCG products continues to remain soft and despite headwinds, the company has posted competitive and profitable growth. "During the quarter under review, our advertising & promotions (A&P) spend was lower than last year by 175 bps, he added.
HULs overall expenses during the period stood at R6,473.68 crore against R5,871.25 crore in the year-ago period.
Commenting on the company's performance, Abneesh Roy, associate director at Edelweiss Securities, said most of HULs margin expansion is because of a sharp cut in ad spends by 175 bps YoY. A&P spend as a percentage of sales stands at 12.1% (A&P down both YoY and QoQ) which is second lowest in the last 11 quarters, HULs sales growth in personal products at 9.9% YoY was much lower than 15% growth seen in Q1FY15, he added.
Harish Manwani, chairman of HUL said, "In a low growth environment, our emphasis on market development and innovations has helped deliver another quarter of double digit growth and a healthy improvement in operating margins".
On HULs e-commerce plans, Manwani said it is building its capabilities in the e-commerce channel recognizing the growing importance of this medium. ''Globally, we have created a dedicated team that is looking at e-commerce across our key markets including India. We are planning to bring the best practices in this channel to other countries,'' he added. According to Manwani, HUL will work with its current set of customers to get a fair share of the e-commerce platform. "If Amazon comes into the grocery sector in India we must be a part of it, he added.