High input costs have resulted in Hindustan Unilever posting a 1.78 per cent fall in net profit at Rs 637.51 crore (Rs 649.11 crore) for the third quarter ended December 31, 2010.

Net sales increased by 12 per cent to Rs 5,027.01 crore(Rs 4,504.26 crore). The company's scrip fell 5.54 per cent to close at Rs 281.65 on the BSE on Tuesday.

Mr R. Sridhar, Chief Financial Officer, said, “There were cost pressures, which impacted the margins, particularly in soaps and detergents apart from significant competitive pressures during the quarter. Input costs have inched up, driven by agri-commodities like palm oil and crude.”

HUL will continue to look at ‘judicious' price increases in certain categories to maintain its margins. Its Home and Personal Care business grew 11.6 per cent and Foods business by 11.3 per cent. However, the loss in the foods business escalated to Rs 16.06 crore from Rs 1.25 crore. “During the quarter, we launched Knorr soupy noodles for which higher investments were made,” Mr Sridhar said.

HUL also increased its advertising and promotion spends by 17 per cent to Rs 743.26 crore (Rs 632.88 crore).