FMCG major Hindustan Unilever’s earnings for the April-June quarter were broadly in line with estimates with the net profit on a standalone basis increasing by 19.2% to Rs 1,529 crore on the back of domestic volume growth and operational performance.
Revenue from operations increased 11.2% to Rs 9,487 crore. EBITDA (earnings before interest, tax, depreciation and amortisation) increased 20.6% to Rs 2,251 crore during the quarter and margin improved by 183 basis points to 23.73%.
“We have delivered another strong performance in the quarter, with double digit volume growth across all three divisions and further improvement in margins,” Sanjiv Mehta, CMD, said in a statement.
“The company had taken some price cuts in the first quarter of this financial year and cost of goods sold were lower on account of mix, judicious pricing and a strong savings programme. In the coming quarters the company will continue to evaluate inflationary trends and keep reviewing prices. Oil prices and rupee has remained volatile in the quarter and we will have to see how it goes in the second quarter before we review our prices. Sometimes we don’t take upfront price cut but we may increase the size or quantity of the products. Our margins have been consistently growing and out of 27 quarters only one quarter during the demonetisation our margins didn’t grow, remaining 26 quarters our margins have grown. Crude volatility and currency led inflation are key risks going ahead,” Mehta said.
Domestic volume growth was in line with street estimates, at 12% against 11% in previous quarter and 0% a year ago during the same period.
Further the company will continue to remain aggressive to drive volume growth and will not shy away from investing in research and stepping up advertising and promotions. “Despite inflationary pressures, we have not cut back on advertising and promotion spent. Advertising and promotional spent were stepped up in Q1 FY19 to respond to competitive actions in the market place. Investment in research and to support innovations will also continue,” Mehta said.