Mumbai: India’s largest consumer packaged goods firm Hindustan Unilever Ltd (HUL) said India’s rural growth is yet to recover, highlighting demonetisation and the goods and services tax (GST) as part of a “challenging environment” in the last few quarters.
In an investor presentation for the JP Morgan India Investor Summit, HUL”s chief executive officer Sanjiv Mehta showed India’s rural growth had begun lagging behind that of urban India for the first time in fiscal year 2017. As per Nielsen data quoted in the presentation, rural growth outstripped urban growth for the last 3 fiscals and was last behind urban India only in FY2012.
This was coupled with a subdued consumer market, the presentation said, that showed a steady fall since FY2012.
After the implementation of the GST on 1 July, HUL said the early part of the quarter ending September 2017 “was affected by various myths in trade,” but that trade channels were now improving while the wholesale channel was now stabilizing.
As per data from the presentation, HUL saw net profit grow 6% and 8% in the quarters ending June 2017 and March 2017 respectively, although profits were flat in the quarter ending December 2016 when demonetisation or the ban of high value currency notes was announced.
In an earnings press briefing held in July this year, HUL had said that GST will continue to affect earnings in the coming quarters, Mint reported on 19 July.