Muted rural demand hits HUL’s bottom line
FMCG major’s Q2 net marginally falls to Rs2,657 cr from Rs2,670cr in yr ago qtr; Board okays interim dividend of Rs18 per share
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We delivered resilient and competitive growth whilst stepping up our EBITDA margin in a challenging operating environment, marked by subdued rural demand and heightened competitive intensity - Rohit Jawa,CEO&MD at HUL
Cautious Optimism
♦ Gradual recovery in FMCG demand expected
♦ Tailwinds from the upcoming festive season, govt’s capex will push demand
♦ Industry cautious over volatile global commodity prices
New Delhi: Hindustan Unilever Ltd (HUL) on Thursday reported a marginal decline in consolidated net profit to Rs2,657 crore for the second quarter ended September 30 amid subdued rural demand and heightened competitive intensity. The company had posted a consolidated net profit of Rs2,670 crore in the same quarter last fiscal, Hindustan Unilever Ltd (HUL) said in a regulatory filing.
The consolidated total income stood at Rs15,806 crore in the quarter under review compared to Rs15,253 crore in the year-ago period, it added. Its total expenses in the second quarter were higher at Rs12,211 crore against Rs11,965 crore a year ago. HUL said its board has approved an interim dividend of Rs18 per equity share of face value of Re 1 each for the financial year ending March 31, 2024.
“We delivered resilient and competitive growth whilst stepping up our EBITDA margin in a challenging operating environment, marked by subdued rural demand and heightened competitive intensity,” HUL CEO and Managing Director Rohit Jawa said.
The company said that during the second quarter, home care grew three per cent and fabric wash had mid-single-digit volume growth, with the premium portfolio continuing to outperform, while household care volumes grew in high single digits led by dishwasher.
Beauty and personal care had a mid-single digit with volume-led growth. Revenue declined as further price reductions were taken in soaps, it added. The foods and refreshment category saw mid-single-digit growth, driven by pricing. Tea delivered modest growth as the category continued to witness consumers downgrading, while coffee grew in double-digits.
On the outlook, Jawa said, “Looking forward, we remain cautiously optimistic. FMCG demand is likely to continue a gradual recovery with tailwinds from the upcoming festive season, sustained buoyancy of services and government’s thrust on capex”. At the same time, he said, “We need to be watchful of volatile global commodity prices as well as the impact of monsoon on crop output and reservoir levels”.
In this context, Jawa said, “Our focus is to provide superior value to our consumers, drive competitive volume growth, and invest behind our brands. We remain confident of the mid to long-term potential of the Indian FMCG sector and HUL’s ability to deliver consistent, competitive, profitable and responsible growth.”
