HUL Q3 net up 7% at Rs 1038 cr, volume growth at -4%

Hindustan Unilever's net profit jumped 7 percent to Rs 1038 crore in October-December from Rs 971.2 crore in corresponding quarter last fiscal. It had an exceptional profit on sale of surplus properties of Rs 159 crore and restructuring expenses of Rs 5.95 crore. Without the exception item, net profit in Q3 fell 10 percent to Rs 919.86 crore.Income, during the quarter, dropped 0.8 percent at Rs 8318 crore against Rs 8384.7 crore in year-ago period. Volume growth was disappointing at -4percent from -1 percent quarter-on-quarter.According to a CNBC-TV18 poll, the FMCG's net profit was seen falling 0.5 percent in October-December to Rs 967 crore and total income was expected to fall 4 percent at Rs 7450 crore in year-ago period. EBITDA in Q3 slipped 5.2 percentat Rs 1355.4 crore versus Rs 1430.2 crore while  EBITDA margin stood at 16.3 percent versus 17 percent (YoY). Home care revenue was up 1 percent at  Rs 2,689 crore versus Rs 2661.7 crore (YoY).The company says that during the quarter, squeeze in liquidity resulted in reduced trade pipelines and lower consumer offtake. "The impact was varied across segments, channels and geographies. We responded to these adverse market conditions with speed by rejigging our supply chain, supported our channel partners by extending credit and unchanged our direct distribution coverage. We also sustained our brand building spends and our innovation initiatives, Despite short term challenges of the quarter, the premium part of our portfolio continued to perform well,” a company statement said.HUL also added that cost of goods sold was higher by 60 basis points due to rising input costs.Talking about the HUL results, Sanjay Manyal of ICICI Direct said that stocking at the distributor level probably led to better numbers.Jubil Jain of Philip Capital says the three key things analysts will focus on are - --- input prices moving up- whether the wholesale channel will pick up as this channel was impacted by demonetisation- the overall competitive intensityJain also said that there will not be a huge change in their earnings per share (EPS) estimates since the numbers are in line. He sees the stock in green and said that even in an inflationary scenario HUL can perform better than its competitors.