HUL Q3 net rises 18% on market share gains

Sales up 10.25% at Rs 13,196 cr; but inflation a concern.

New Delhi (PTI): FMCG major Hindustan Unilever Ltd on Thursday reported an 18.68 per cent increase in consolidated net profit to Rs 2,300 crore for the third quarter ended December 2021, helped by volume-driven growth and “handsome market share gains” in all divisions amid high inflation impacting demand, especially in the rural market.

The company had posted a net profit of Rs 1,938 crore in the October- December period of the previous fiscal. Revenue from sales during the quarter under review stood at Rs 13,196 crore, up 10.25 per cent, as against Rs 11,969 crore in the corresponding period a year ago, Hindustan Unilever Ltd (HUL) said in a regulatory filing.

HUL’s total expenses were at Rs 10,329 crore in Q3 FY2021-22, up 8.18 per cent from Rs 9,548 crore earlier. “Business fundamentals remained strong with handsome market share gains in all our divisions, both urban and rural markets and across price segments. Underlying Volume Growth at 2 per cent was significantly ahead of the market,” HUL said in a post-earnings statement.

In the October-December quarter, HUL’s EBITDA margin at 25.4 per cent improved by 100 basis points (bps) YoY. Like other FMCG firms, HUL also faced inflationary headwinds and had gone for calibrated price increases during the quarter.

“In the context of unprecedented inflation, we continue to manage our business dynamically, driving savings harder across all lines of Profit & Loss and taking calibrated pricing actions using the principles of Net Revenue Management. We continue to invest competitively behind our brands,” said HUL.

CMD lauds performance

HUL CMD Sanjiv Mehta said the company has delivered a “strong and resilient” performance in the quarter despite “moderation” in market growth and significant levels of commodity inflation. “I am particularly pleased that the growth is extremely competitive with our market share gains being highest in more than a decade. Our performance is reflective of our strategic clarity, the strength of our brands, operational excellence, and dynamic financial management of our business,” he said.

However, he added that in the near term, the operating environment will continue to remain challenging. “In this scenario, we will manage our business with agility, continue to grow our consumer franchise whilst maintaining our margins in a healthy range. 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 added.

Home care grows 23%

During the quarter, HUL’s revenue from the home care segment climbed 22.97 per cent to Rs 4,192 crore as against Rs 3,409 crore in Q3 FY 2020-21.

“Home Care growth at 23 per cent was broad-based with a strong performance in Fabric Wash and Household Care. Fabric Wash grew in strong double-digits with all parts of the portfolio performing well. Household Care sustained its robust performance and grew in the high teens on a strong base,” said HUL. Calibrated price increases were taken across the fabric wash and household care portfolios to partly offset the significant inflation in input costs, it added.

Revenue from the beauty and personal care segment was up 7.08 per cent to Rs 5,213 crore as against Rs 4,868 crore, led by skin cleansing, skin care and colour cosmetics.

Cosmetic sales top pre-Covid levels

“Skin Cleansing delivered double- digit growth driven by strong performance in ‘Lux’, ‘Dove’ and ‘Pears’. Hair Care had a steady quarter enabled by strong performance in the premium portfolio,” said HUL.

A calibrated price increase in the skin cleansing and hair care segment also helped it protect the business model, even as vegetable oil prices continued to increase at record levels. “Together, Skin Care and Colour Cosmetics delivered double-digit growth and are above pre-COVID levels,” said HUL.