Hindustan Unilever (HUL) today reported its financial results for the third quarter ended December 31, 2023. The company delivered a resilient performance despite a challenging operating environment characterized by uneven monsoons, delayed winter, and weak rural demand.
HUL saw a decline of 1% in its revenue from its key home care segment comprising fabric wash and household care. However, it did see 'mid-single digit' volume growth.
Overall, HUL posted a 2% underlying volume growth (UVG) in the quarter across its core categories of home care and beauty & personal care which constitute about 75% of its business.
However, its foods & refreshments segment saw a low single-digit volume decline due to pricing actions taken earlier.
Underlying sales growth (USG) remained flat during the quarter owing to price reductions undertaken by HUL. Total revenue remained flat at Rs 14,928 cr against 14,986 in the year-ago period.
EBITDA margins came in at 23.7%, expanding by 10 basis points. Quarterly net profit rose by 1% to Rs 2,519 crore while profit after tax before exceptional items (PAT BEI) dipped 2% to Rs 2,541 crore.
The company's beauty & personal care segment clocked mid-single digit volume growth, led by hair care and premium skin offerings. Hair care notched up double-digit volume-led growth across brands and formats like serums, masks and conditioners.
Performance of skin cleansing products declined due to price reductions while growth of skin care range suffered due to delayed winters. Oral care grew mid-single digits anchored by Closeup franchise.
HUL's foods & refreshments revenues inched up 1%, aided by tea portfolio gains, higher coffee prices and robust growth in foods solutions, mayonnaise and peanut butter. On the other hand, health food drinks and ice creams saw modest price-led growths.
Gross margins expanded by 400 bps in Q3 while advertising & promotion spends were upped by 270 bps, reflecting HUL's aggression on investments behind brands and strategic priorities like increasing market development and driving premiumization.
For the nine months ending December 2023, HUL recorded a 3% turnover growth to Rs 44,886 crore while EBITDA and PAT (BEI) increased 6% each to Rs 10,755 crore and Rs 7,709 crore respectively.
Commenting on the results, HUL CEO and Managing Director Rohit Jawa said the company remains focused on reinforcing its strong operating fundamentals centered around optimal pricing, marketing investments and innovations to fuel responsible growth.
He voiced cautious optimism on near term outlook, pegging gradual recovery in consumer demand on the back of higher rural incomes, decent winter crop output and government spending. However, competitive intensity will continue to remain high amid stable commodity prices, Jawa added.