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Hindustan Unilever has reported a 17.62 per cent increase in net profit at Rs 627.18 crore (Rs 533.21crore) for the quarter ended June 30, 2011.
During the period, the company's net sales jumped by 14. 8 per cent to Rs 5,503.89 crore from Rs 4,793.89 crore in the corresponding quarter last fiscal. This includes exceptional items including the sale of property worth Rs 50.99 crore.
Underlying volume growth at 8.3 per cent helped the domestic consumer business to grow by 15 per cent. The domestic HPC (Home and Personal care) business grew by 15.3 per cent while the foods business recorded growth of 14.8 per cent
Addressing a press conference, Mr R. Sridhar, Chief Financial Officer, HUL, said, “Input cost inflation will continue to remain and these are related to global trends and other speculative factors. It is the commodity-driven categories like soaps and detergents which are significantly impacted.”
Soaps and detergents
During the quarter, soaps and detergents grew by 12.8 per cent with revenues increasing from Rs 2,264.46 crore to Rs 2,555.04 crore. Personal products grew at 19.4 per cent with revenues increasing from Rs 1,365.51 crore to Rs 1,630.70 crore.
“Volume growth has slowed down in soaps and detergents but not in personal products which has seen innovations supported by execution in new categories like hand sanitisers and body washes,” said Mr Sridhar.
Reviewing price movements
Having taken slight price increases this quarter, HUL is reviewing the price movements of commodities to drive the right balance between achieving volumes and taking price increases.
“We have started taking weekly meetings at HUL across all the departments to review commodity prices. While we have to take aggressive cost saving measures, we have to keep the consumer value attractive along with judicious pricing,'' added Mr Sridhar.
The HUL scrip dropped by 0.98 per cent and closed at Rs 322.70 on Thursday.
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