On October 19, Hindustan Unilever Ltd (HUL) disclosed a standalone net profit of Rs 2,717 crore for the September quarter, marking a 3.86 percent increase compared to the same period in the previous year. India’s largest FMCG company also reported a 3.53 percent growth in revenue, reaching Rs 15,027 crore, as per an official exchange filing.
Notably, HUL clarified that the reported figures encompass a one-time credit resulting from a favorable resolution of a past indirect tax dispute. This credit positively impacted reported turnover and profit after tax (PAT) growth by 1 percent and 4 percent, respectively.
Market analysts had anticipated that factors such as price reductions, royalty payments, and advertising expenses would exert downward pressure on profits. Broader concerns revolved around subdued rural demand due to consumer challenges posed by inflationary pressures.
For the period spanning July to September, HUL’s earnings before interest, tax, depreciation, and amortization (EBITDA) reached Rs 3,694 crore, reflecting a substantial 9.4 percent growth year-on-year. The EBITDA margin witnessed a noteworthy improvement of 130 basis points compared to the previous year, settling at 24.5 percent.
Advertising expenditure amounted to Rs 1,720 crore, with the ad spend as a percentage of sales reaching 11.4 percent, surpassing the levels of 7 percent seen a year ago. Importantly, gross margin savings were reinvested to fuel sales growth. HUL’s underlying sales growth for the September quarter stood at a commendable 4 percent.
Furthermore, within its product portfolio, HUL noted the home-care division achieved a 3.3 percent increase in revenue, while beauty and personal care exhibited robust performance across categories, resulting in a 4.5 percent revenue growth. The food and refreshments segment registered a growth rate of 2.6 percent, driven by segments such as foods, coffee, and health food drinks (HFD).
On Thursday, HUL’s shares on the National Stock Exchange (NSE) closed at Rs. 2,550, reflecting a marginal increase of 0.07%.