Companies

HUL net profit rises 19% in Q3

Our Bureau Mumbai | Updated on January 27, 2021

Hindustan Unilever Limited on Wednesday posted a consolidated net profit of ₹1,938 crore in the third quarter ended December 31, 2020, a 1.82 per cent dip compared to the preceding quarter of the year. It had posted a consolidated net profit of ₹1,974 crore in the second quarter of the fiscal year.

During the third quarter, the total income stood at ₹12,235 crore, a 3.89 per cent increase compared to the second quarter’s total revenue of ₹11,776 crore.

On a year-on-year basis, the consolidated net profit increased 18.82 per cent compared to the year-ago quarter consolidated net profit of ₹1,631 crore. The total income during the quarter under review increased 19.85 per cent y-o-y compared to Q3FY20’s total income of ₹10,208 crore.

Domestic consumer growth (excluding the impact of the merger of GSK CH and acquisition of ‘VWash’) grew at 7 per cent during the quarter, the company said. “Higher mobility, consumer-relevant innovations and investments behind market development are driving business momentum. Our business fundamentals remain strong, with 86% of our business gaining penetration. Health, hygiene and nutrition forming around 80% of our portfolio continues to grow in double digits, and we have seen significant improvement in discretionary categories,” HUL said.

“With Covid cases coming down sharply and increasing mobility, economic activity in the country continues to improve. The rapid rollout of vaccines will give further impetus to economic growth. Our consumer-relevant innovations, market development and execution excellence, have enabled us to drive broad-based growth across our categories in the December quarter. I am particularly pleased with the performance of our nutrition business and with the recovery in the discretionary segments of our portfolio; these are structurally attractive and offer immense growth potential,” said Sanjiv Mehta, Chairman and Managing Director, HUL.

The near-term demand outlook is improving, and we expect to see revival in the urban market, while the rural market should continue to do well, added Mehta. “Inflationary pressures are building up in select commodities and we will manage them judiciously. I am confident that we are very well positioned to capture the growth opportunities and accelerate momentum.”

“We are seeing significant inflation in select categories, like skin cleansing and tea. In skin cleansing, we took around a 2.5% increase in price in the December quarter. We are taking another 2.5% hike in price currently...If these levels of inflation sustain, we will also have to look at pricing in addition to everything that we do… it will be in select categories, but select large categories,” said Srinivas Phatak, CFO, HUL.

The worst is over now for the FMCG sector and the company, said Mehta. On his expectations from the upcoming budget, Mehta said that now that the supply-side constraints are getting over, a stimulus on the demand side would help.

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Published on January 27, 2021
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