The largest fast moving consumer goods player Hindustan Unilever (HUL) Wednesday disappointed the markets with a 6 percent fall in standalone net profit at Rs 2,406 crore for the fourth quarter of the last fiscal as against Rs 2,552 crore in the year-ago period.
Its sales rose only marginally to Rs 14,693 crore, with revenue in a key segment of beauty and personal care declining 2.7 percent.
Market analysts were expecting the FMCG giant to login in Rs 2,435 crore of net income on revenue of Rs 14,913 crore.
The poor numbers are in spite of the fact that the company has managed to expand the gross margins by 316 bps to 51.9 percent.
Despite lower net income, the company announced a final dividend of Rs 24/share for FY24. It had earlier paid an interim dividend of Rs 18 per share in November 2023, thus taking the total dividend for FY24 to Rs 42/share of face value of Re 1.
Following the lower-than expected numbers, the HUL counter closed marginally lower Rs 2,259.15 on the BSE as against the closing 0.16 percent up.
The fall in revenue and earnings were led by the poor show by the homecare segment, which is its biggest business vertical that houses brands like Surf Excel and Comfort, posting mid-single-digit percentage volume growth.
Commenting on the numbers, Rohit Jawa, the chief executive and managing director of the company, said, "We delivered a resilient performance crossing the Rs 10,000 crore net profit mark for the full fiscal. We remain focused on driving operational excellence and have continued to build back our gross margins while stepping up investment in brands and long-term capabilities."
He added, "Looking forward, I am optimistic of consumer demand gradually improving due to a normal monsoon and better macro-economic indicators. With rising affluence, under-indexed FMCG consumption and a strong digital infrastructure, we are very confident of the medium to long-term potential of the market."
Volume growth was 2 percent with negative realisation for a consequent second quarter. "We expect slow and modest recovery resulting in gradual pick up in volume with realisations turning positive in H2FY25. We believe heightened competitive intensity will limit any meaningful recovery in both volumes and margins in the near term," Amnish Aggarwal, the head of institutional research at Prabhudas Lilladher said.
