Hindustan Unilever Ltd (HUL) on Friday trailed expectations when it reported flat profits for the quarter ended December 31 as it was hit by weak consumer sentiments, particularly in the rural market.
The FMCG giant posted a standalone net profit of Rs 2,519 crore against Rs 2,505 crore in the corresponding period of the previous year.
Brokerages had estimated the company will report a net profit of around Rs 2,700 crore.
During the quarter, while the underlying volume growth (UVG) was stable at 2 per cent, total segment revenues, including sales and other operating income, declined to Rs 15,188 crore from Rs 15,228 crore in the year-ago period.
HUL said the home care and beauty and personal care, which constitutes about 75 per cent of its business continues to see volume recovery and had mid-single digit UVG.
However, foods and refreshment witnessed a low single-digit decline in UVG primarily due to pricing taken in the year to offset impact of higher commodity cost. It added that the quarter was marred by weather vagaries, subdued festive season and uneven economic recovery.
According to the company, while the urban market performed better than the rural segment, premium products also scored over mass items.
Commenting on the performance of its various business segments, HUL said home care saw a marginal decline in revenue with mid single-digit UVG in the quarter.
While fabric wash volumes grew in mid single-digit, driven by outperformance in premium portfolio, household care volumes grew in low single-digit led by ‘dishwash’. Similarly, revenues from its beauty and personal care segment were flat with a mid single-digit UVG.
Skin cleansing revenue declined due to the impact of price reductions taken to pass on the benefits of lower commodity costs to consumers.
Though delayed winter impacted skin care brands in the quarter, its premium non-winter portfolio continued to do well.