Shares of Hindustan Unilever Ltd declined nearly 3 per cent on Friday as investors preferred to desert the counter amid concerns over increase in royalty and central services arrangement fee to its parent Unilever group.
The stock fell 4.15 per cent to ₹2,540.05 apiece on the BSE in the morning trade.
At 12.15 pm, the stock was down ₹ 2,586.30, down by 2.40 per cent on the BSE.
At the NSE, it went lower by 2.40 per cent to ₹2,586.05 apiece.
The stock was the biggest laggard among the Sensex and Nifty pack.
FMCG major Hindustan Unilever Ltd on Thursday reported a 7.9 per cent increase in its consolidated net profit at ₹2,481 crore for the third quarter ended December 31, 2022.
The company, which had posted a net profit of ₹2,300 crore in the October-December quarter of the previous fiscal, said its board has approved a new royalty and central services arrangement with Unilever Group that will see an increase in the fees for the same to 3.45 per cent of turnover from 2.65 per cent in FY22.
Hindustan Unilever on Thursday said its board has approved an increase in royalty and central services arrangement fee to its parent Unilever group for getting technology, trademark licenses and services.
"HUL's December quarter report was broadly on expected lines but the Street for now is more focused on estimating the damage that occasional tinkering of royalty rates could do to the intrinsic value of the stock," according to a research report by JM Financial Institutional Securities Limited.
Its consolidated total income during the quarter under review rose 16.35 per cent to Rs 15,707 crore against Rs 13,499 crore a year ago, Hindustan Unilever Ltd (HUL) said in a regulatory filing.