Hindustan Unilever trailed Street estimates for the first quarter ended June 30 with an 8 per cent growth in standalone net profits at Rs 2,472 crore against Rs 2,289 crore in the same period of the previous year.
Brokerages such as BNP Paribas were expecting the company to report a 12.9 per cent growth in its net profit for the period. The staid numbers reflected weak demand though the company’s top officials claimed that the FMCG industry was recovering gradually.
During the quarter, the volume growth came in at 3 per cent which was also below brokerages projection of 4 per cent. Sales grew to Rs 14,931 crore from Rs 14,016 crore in the year-ago period.
“The FMCG markets are recovering gradually although the operating environment remains challenging. In this context we have delivered a resilient and competitive performance whilst stepping up our EBITDA margin.
“In the near-term, the FMCG industry will continue to witness rebalancing of price-volume growth equation and a gradual recovery in consumer demand. In this environment, we will continue to provide superior value to our consumers and invest behind our brands,’’ Rohit Jawa, CEO and managing director, said.
During the period, while its EBITDA margins rose 40 basis points to 23.6 per cent, home care saw a double-digit growth with a 10 per cent revenue rise and mid-single-digit volume growth.
The beauty and personal care segment delivered 4 per cent revenue growth with mid-single-digit volume growth. The foods and refreshment business also saw a steady performance led by health food drinks and food solutions.
The company’s CFO Ritesh Tiwari added that commodity prices have remained stable and inflation continues to moderate, leading to resurgence of small and regional players, many of whom had vacated the market during peak of inflation.
“With most commodities remaining stable in the quarter, inflation continues to moderate. Consequently, we are seeing a gradual recovery in market volume growth. FMCG market volumes grew in mid-single digit led by urban,” he added. Rural market volumes turned positive during the quarter.
