Hindustan Unilever (HUL) on Thursday reported a 3% year-on-year rise in standalone net profit for the second quarter of the current fiscal at Rs 2,690 crore, aided by one-time gains. However, its standalone revenue came in nearly flat, at Rs 15,585 crore due to trade disruptions caused by the GST rate changes in September and extended rainfall in several parts of India.
Bloomberg consensus estimated had pegged standalone revenue at Rs 15,840 crore for the September quarter, while net profit was forecast at Rs 2,457 crore for the period. Shares of HUL rose as much as 3% intra-day on Thursday on the BSE before paring gains.
On a consolidated basis, net profit rose 4% y-o-y to Rs 2,694 crore, while revenue grew nearly 2% versus last year to Rs 16,061 crore. The company’s underlying sales growth (USG) stood at 2%, with flat underlying volume growth (UVG). Consolidated Ebitda margins narrowed by 90 basis points versus last year to 23.2%. On a standalone basis, Ebitda margins contracted 60 bps (y-o-y) to 22.9% as the company stepped up brand investments.
HUL, which is the sector bellwether, had called out GST transition issues in its Q2 business update last month, saying that it saw the disruption stretching into October, though November would see stabilisation. 40% of its portfolio has been impacted by GST rate changes.
On Thursday, HUL’s CEO & MD Priya Nair, who took over in August, said that the company saw normal trading conditions kicking in from early November, paving the way for a gradual and sustained recovery in the second half of the year, which would be better than the first half.
The company recorded a net positive impact of Rs 184 crore in the second quarter from the resolution of prior years’ tax matters between the UK and Indian tax authorities. However, profit after tax before exceptional items declined 5% (y-o-y). On a consolidated basis, the profit drop before exceptional items was 4%.