Various products made by Hindustan Unilever Ltd., including Lux soap, Surf Excel detergent and Dove Shampoo, sit for sale on a store shelf in Mumbai. (Photographer: Prashanth Vishwanathan/Bloomberg News)

Q3 Results: HUL Delivers Double Digit Volume Growth For Fifth Straight Quarter

Hindustan Unilever Ltd.’s quarterly profit rose at its slowest pace in over a year, even as it delivered double digit volume growth for the fifth straight quarter.

Net profit rose 9 percent year-on-year to Rs 1,444 crore in the quarter ended December, India’s largest consumer goods maker said in an exchange filing. That’s met the Bloomberg consensus estimate of Rs 1,455 crore. The bottom line was impacted as HUL paid taxes worth Rs 510 crore during the period compared with Rs 297 crore a year ago.

The company’s revenue rose 11.3 percent on a yearly basis to Rs 9,558 crore. That compares with the Rs 9,447 crore estimate. Volumes rose 10 percent, in line with analysts’ forecast.

The operating income, or earnings before interest, tax, depreciation and amortisation, rose 21.8 percent year-on-year to Rs 2,046 crore—the consensus estimate was Rs 2,006 crore. Its operating margin expanded to 21.4 percent from 19.6 percent. That’s against a forecast 21.2 percent.

“Mixed improvement and operating leverage contributed to the margin expansion,” Chief Financial Officer Srinivas Pathak said. “The consumer demand was stable during the quarter. The rural demand is ahead of the urban,” Pathak told reporters at a press meet.

The company said its near-term demand outlook is stable. Macroeconomic factors, according to Pathak, will be monitored from the point of view of consumer demand and costs. “Our focus remains on volume-driven growth and improvement in operating margin,” he said.

Segment-Wise Performance (YoY)

  • Home care revenue rose 14.8 percent to Rs 3,148 crore.
  • Revenue from the beauty and personal care segment grew 10.9 percent to Rs 4,539 crore.
  • Food and refreshment revenue rose 9.9 percent to Rs 1,728 crore.

The home care segment has been improving at its fastest pace in the last few quarters, Naveen Kulkarni, head of research at Reliance Capital, told BloombergQuint in an interaction. The segment, he said, reported an expansion in margin. “We continue to remain positive on the home care segment. There are strong structural tailwinds in the home care business and the segment can continue to deliver growth for a very long period.”

Shares of HUL fell 1.3 percent compared with a 0.2 percent decline in the NSE Nifty FMCG Index ahead of the earnings announcement.

Watch the management’s address and analysts takeaways: