HUL Q3 results | Net profit rises 16.8% YoY to Rs 2,243 crore, in line with estimates

A pedestrian walks past the logo of HUL (File image: Reuters)

Hindustan Unilever, India's largest fast-moving consumer goods company, on January 20 reported a 16.8 percent year-on-year rise in net profit to Rs 2,243 crore for the quarter ended December, which was in line with analysts' expectations of Rs 2,242.7 crore.

The soap-to-shampoo maker saw its revenue from operations grow 10.4 percent on-year to Rs 13,092 crore for the reported quarter, which was slightly above Street's estimate of Rs 12,995 crore.

The company's underlying volume growth in the quarter stood at 2 percent as against analysts' estimate of 2.3 percent. "Growth in the quarter was competitive and profitable with Domestic Consumer Growth of 11%," HUL said in a filing to the bourses.

The sequential slowdown in volume growth of the company was on account of slack in the rural market, which is witnessing weakness in demand over the past few months.

"We have delivered a strong and resilient performance in the quarter despite moderation in market growths and significant levels of commodity inflation," Sanjiv Mehta, chairman and managing director of HUL said in a press statement.

The company's operating performance in the quarter was strong despite the headwinds on the raw material costs front. HUL reported a 14.9 percent year-on-year rise in operating profit to Rs 3,279 crore, which was above Street's expectations of Rs 3,188 crore.

The company's operating margin in the reported quarter expanded by 100 basis points on-year to 25.4 percent. Most analysts had expected a 70-90 basis points expansion in margins.

"In the context of unprecedented inflation, we continue to manage our business dynamically driving savings harder across all lines of P&L and taking calibrated pricing actions using the principles of Net Revenue Management," HUL said.

On the revenues front, growth was led by the home care products portfolio, which saw year-on-year growth of 23 percent in the reported quarter. Fabric wash grew in strong double-digits with all parts of the portfolio performing well while household care sustained its robust performance and grew in high teens on a strong base, HUL said.

The beauty and personal care segment grew 7 percent in the quarter led by skin cleansing, skincare, and cosmetics as the reopening of the economy spurred individuals to head out of the home.

The food and refreshments portfolio saw modest growth of 3 percent due to the high base of the year-ago quarter. The tea beverage vertical continued its robust performance and grew on a strong base, the company said.

"We remain confident of the medium to long term potential of the Indian FMCG sector and HUL’s ability to deliver a consistent, competitive, profitable, and responsible growth," Mehta said.