Hindustan Unilever Q4 net up better-than-expected 15%
Hindustan Unilever, the largest fast moving consumer goods company in India, beat street estimates on Monday as net profit rose 15 percent year-on-year to Rs 787 crore, helped by lower cost of key raw materials.
April 30, 2013 / 10:01 IST
Moneycontrol Bureau
Hindustan Unilever, the largest fast moving consumer goods company in India, beat street estimates on Monday as net profit rose 15 percent year-on-year to Rs 787 crore, helped by lower cost of key raw materials.The street cheered the positive surprise and the stock closed up near 7 percent at Rs 497.35 on NSE. The company's net sales in the Jan-March quarter were also ahead of expectations at Rs 6,367 crore, up 13 percent from a year ago. Volumes grew 6 percent.Analysts on average had expected the maker of Lux soap, Surf detergent and Bru coffee to report a net profit of Rs 761 crore, on revenue of Rs 6,317 crore, according to a CNBC-TV18 poll.The company's operating profit margin was up by 50 bps to 15 percent, compared with analysts' expectations of a flat growth. This despite a 21 percent increase in advertising spends at Rs 821 crore."The two highlights of the quarter should be the 6 percent volume growth as well as the margin expansion for the company, despite the increased spending on ad spends front. Going ahead we would be doing some changes to our estimates wherein we might have to go in for higher volume growth," said V Srinivasan of Angel Broking. Among key segments, HUL's soaps and detergents business grew 13 percent. The company has cut prices of certain products like Dove soap on the back of benign input costs.Personal products segment grew 12 percent and growth in oral care was volume-led double-digit on the back of launch of new products and heightened advertising.There has been some slowdown in discretionary spends by consumers, and that was visible, particularly in packaged foods, which grew only 7 percent. While HUL maintained that Kissan ketchups saw double-digit growth, ice creams, in particular, grew "modestly", impacted by a "slowdown in the market."HUL Chairman Harish Manwani said the company had delivered broad based competitive growth and margin improvement in a challenging environment."While there are near-term concerns around slowing market growth and inflationary pressures on consumers, we are confident of the medium to long-term growth prospects of the FMCG sector and remain focused on delivering consistent, and competitive growth with sustainable operating margin improvement," he said.To continue to deliver strong growth, HUL is likely to continue with aggressive marketing and offer discounts/price cuts, especially in soaps, detergents and personal products as input cost pressures remain low and the company fights off competition rivals domestic as well as multi-national, R Sridhar, its CFO said.Nachiket Kelkar
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