Hindustan Unilever Ltd, which makes products such as Horlicks and Surf Excel, reported an 8% year-on-year increase in net profit to Rs 2,472 cr, riding on a 3% increase in the quantity of products sold.
EBITDA -- which is a measure of profit that strips away the impact of non-operating items such as interest rates and taxes -- was up 0.4 percentage points at 23.6% of sales.
Sequentially, gross margin was up 1.40 percentage points and advertising and promotional spending was stepped up by 1.10 percentage points.
Overall sales was up 7% on the year as the company benefited from higher prices for its end-products.
The company said the markets for packaged consumer goods is "recovering gradually" although the operating environment "remained challenging". HUL has been forced to raise prices in recent quarters due to a run up in raw material prices.
"In the near-term, FMCG industry will continue to witness rebalancing of price-volume growth equation and a gradual recovery in consumer demand," the company said.
"If commodities remain where they are, our price growth to be flattish or negative in the coming quarters," it added.
It predicted that competitive intensity may go up further in coming months, and that it is focused on sustaining its volume growth momentum, indicating that it will quick to pass on any decline in raw material prices to consumers.
However, it also said it will try to find the "right price-value equation" and build back its gross margin.
It also predicted a step-up in advertising and promotional spending.
For the Apr-Jun period, HUL's profit before tax rose 9% on the year to 3,365 cr, while EBITDA was also up 8% on the year at Rs 3,521 cr.
Home Care delivered a quarter of strong performance with 10% revenue growth and mid-single digit UVG
Beauty & Personal Care delivered 4% revenue growth with mid-single digit volume growth, while foods & refreshment revenue grew 5% with near flat volumes.