Mumbai: Hindustan Unilever, India’s largest consumer packaged goods firm, posted a 6.1% rise in March quarter net profits, on the back of a 4% rise in volumes, indicating the worst of demonetization’s impact on consumer spending may now have receded.
The company had maintained 4% volume growth year-on-year in the first 2 quarters of FY16-17, although it had fallen 4% in the December quarter in the immediate aftermath of the high value currency note ban.
The net profit of Rs1,183 crore beat Street estimates. A Bloomberg poll of 24 analysts had estimated HUL's March quarter net profit at Rs1,084.9 crore.
HUL’s total income stood at Rs8,969 crore, up 6.3% from Rs8,430 crore a year ago. The company's domestic consumer business grew 8%, it said.
The company also saw a 8% increase in revenues for the ‘personal care’ or soaps segment – HUL’s largest — as it continued taking price hikes for the third consecutive quarter.
HUL’s EBITDA (earnings before interest, tax, depreciation, and amortisation) also rose 12% as the cost of inputs fell by 20 bps because of moderating inflation.
“With gradual improvement in market conditions, we remain optimistic about the medium term outlook for our sector ”, HUL chairman Harish Manwani said in a press statement.
Analysts tracking the company had largely expected HUL to post a modest rise in revenues between 2-7% and in volumes of around 4% as it had maintained for this financial year.
“Both volume and value growth (is) accelerating even from pre-demonetisation levels as pipeline issues in soaps are resolved and price growth accelerates”, Vice President at equities brokerage firm IIFL Percy Panthaki wrote in a report from 24 March titled “HUL: Good Times Ahead”.
The company ended financial year 2017 with total revenue of Rs35,013 crore and net profit of Rs4,490, a 9% rise year-on-year.
HUL shares gained 0.82% to close at Rs1,006.35 on the BSE while the benchmark index, Sensex gained 0.25% to close at 30,658.77 points. Earnings were declared after the markets closed.