HUL Q3 net profit jumps 28% to Rs1,326 cr on GST gains
18 January 2018
Consumer goods major Hindustan Unilever Ltd (HUL) on Wednesday reported a 28 per cent spurt in its net profit for fiscal third quarter to Rs1,326 crore even as its revenue grew 11.4 per cent to Rs8,590 crore during the quarter.
HUL said it gained from lower GST rate for most of its products and a healthy volume growth on a low base in the previous year, which saw HUL and other consumer goods manufacturers taking a hit due to currency ban.
HUL said its sales volume growth improved as the economy and businesses recovered from the impact of demonetisation and partly due to the rollout of GST from July 2017. The company's earnings before interest, taxes, depreciation and amortisation rose 24 per cent to Rs1,680 crore, while EBITDA margin grew by two percentage points to 19.6 per cent.
''There are early signs of commodity cost inflation and we will further sharpen our focus on cost effectiveness programs and manage our business dynamically for competitiveness and sustained profitability,'' said Harish Manwani, chairman, HUL.
HUL, meanwhile, said, the company ''proactively disclosed'' an estimated Rs119 crore to the CBEC and has offered to pay the amount suo motu to the government.
It may be noted that HUL had been slapped with a notice by the GST anti-profiteering body for failing to pass on lower tax rates on certain categories like detergents and dishwashing soaps. ''This amount is not recognised as revenue and is accounted as a liability as on 31st December 17,'' the company said in a statement.
HUL's home care segment recorded double-digit volume growth led by strong performance by Vim, while personal care segment growth was led by Dove and Pears. Similarly, skin care business was driven by Fair & Lovely.
Meanwhile, reports quoting HUL CFO Srinivas Phatak said that following the reduction in GST rates, the company had reduced product prices and increased grammage in more than 800 of its stock keeping units. At present, nearly 95 per cent of its products in the market come with the new pricing (based on new GST rates), it added.