MUMBAI: Hindustan Unilever Ltd, the country’s biggest personal care products company, said it posted a net profit of Rs 1,252.17 crore in the three months ended December 31, 2015 compared with Rs 1062.31 crore in the same quarter previous year. The company’s profits were buoyed by an extraordinary item of the sale of properties for Rs 396.6 crore.
The company, which also benefited from falling global commodity and crude oil prices, said its net profit before the extraordinary item was Rs 955.32 crore compared with Rs 954.74 crore. Net sales rose to Rs 7,579.18 crore in the quarter ended December 31, 2015 from Rs 7, 037.78 crore.
Input costs were benign, led by crude and thus has started to reflect in the lower cost of goods sold. Brand investments were sustained all competitive levels across all segments even as competitive intensity stepped up in the competitive linked categories, the company said.
“The volume growth was soft during the quarter and there was modest pickup in the market,’’ said chief financial officer P B Balaji. “However, input costs have come down shortly due to falling crude prices. Our emphasis on market development and innovation helped deliver another quarter of double digit growth and improvement in operating margins.’’
Revenue from packaged food segment grew 12.64 per cent to Rs 419.9 crore. Some other categories such as exports, water and infant care grew by 27.8 per cent to Rs 353.30 crore.
“We would expect that sales growth of the company shall pick up in the coming quarters, as lower inflation, improved sentiment help lift volume growth,’’ said Ritwik Rai, FMCG analyst at Kotak Securities. “Benefits of lower commodity prices are visible in the quarter, and will continue to be a useful tailwind for the company.’’
Yet, soap and detergent grew by a modest 5.95 per cent to Rs 3,600.22 crore compared with Rs 3,397.86 crore. Personal products grew 6.5 per cent to Rs 2,454.55 crore and beverages grew 8.2 per cent to Rs 919.65 crore.
Sanjiv Mehta, Managing Director and CEO, said though the company saw a pickup in rural sales, but it was still early to say if it would sustain. The company’s shares fell 5.3 per cent to Rs 892.80.
“The stock could see some near-term pressure, given sharp run-up in recent sessions and disappointing 3QFY15 results,’’ said Rai.
“However, our medium-term view on the stock remains constructive,’’ he pointed out.