Hind Unilever Q1 net profit almost flat at Rs1,059 cr

Consumer goods major Hindustan Unilever Ltd (HUL) has reported a net profit of Rs1,059 crore for fiscal first quarter ended 30 June 2015, almost unchanged from the Rs1,053 crore reported in the year-ago quarter.

Growth was impacted by the one-time profit on sale of investments in the base quarter and the higher tax rate.

Net sales in the April-June quarter was up 5.35 per cent at Rs7,782.82 crore compared with Rs7,387.48 crore in the corresponding quarter in 2014.

The growth in products sales, which includes brands like Knorr soups, Surf and Wheel detergents, and Lux soaps under home and personal care, water and foods range, was primarily driven by volumes as the company had initiated some price cuts during the quarter.

The soaps and detergents business, which accounts for over 48 per cent of its overall sales, grew 0.18 per cent, personal products 11.39 per cent and beverages by 9.36 per cent.

For the last 10 quarters, the company's volume growth has been in the 3-6% range.

During the quarter the company's ad spent rose 22.07 per cent year-on-year to Rs1,153.39 crore.

Harish Manwani, chairman, HUL, said, ''In a subdued market environment, the business delivered another quarter of healthy volume-led growth and strong improvement in operating margin. We are particularly pleased with the stepped up momentum in personal products and the sustained double-digit performance in packaged foods.

''With the near-term outlook largely dependent on a pick-up in rural markets and commodity costs expected to remain benign with little or no price growth across select categories, our focus will be to drive market development and simultaneously deliver cost efficiencies to sustain profitable volume-led growth.''

During the quarter, the company posted a 6 per cent underlying volume growth. Growth during the quarter was impacted by the phasing out of excise duty incentives and price de-growth, as the benefit of lower commodity costs was passed on to consumers, the company said in a statement.

Other consumer goods companies such as Nestle India Ltd, Dabur India Ltd and Godrej Consumer products Ltd will announce their earnings on 29 July, followed by ITC Ltd, Colgate Palmolive India Ltd and Jyothy Laboratories Ltd on 30 July.

The Hindustan Unilever stock was down 2.17 per cent at Rs893 on the BSE at 2.20pm today, while the benchmark Sensex was down 0.01 per cent at 28,417.37 points and the BSE FMCG Index down 1.24 per cent at 78,56.48 points.