HUL net up at Rs 872 cr on better margins

The country's largest FMCG (fast- moving consumer goods) company Hindustan Unilever Ltd on Monday reported 11- per cent increase in net profit at Rs 872 crore for the January-March quarter as sales went up nine per cent and margins improved.

HUL chairman Harish Manwani said, "Against a challenging environment, we delivered another year of competitive and profitable growth. We stepped up investment in our brands and innovations while driving cost savings and operational efficiencies with even greater rigour.'' For the full fiscal 2013- 14, HUL's net profit rose to Rs3,955 crore from Rs3,839 crore while total sales increased 8.7 per cent to Rs28,539 crore from Rs26,317 crore in the previous year.

The company has declared a dividend of Rs7.50 per equity share of face value of Rs1 for the fiscal year.

Speaking to reporters on a conference call, HUL chief financial officer Sridhar refused to offer a guidance citing HUL policy but sounded positive saying the company will grow above the industry level.

Margins which rose 30 bps in the reporting quarter were led by better sales in the premium soaps like Dove, Lux and mass brand Breeze, Sridhar said, Net sales climbed 8.9 per cent to Rs6,935.82 crore in the fourth quarter from Rs6,367.14 crore a year ago. Overall expenses in Q4 stood at Rs6,082.32 crore as against Rs5,555.46 crore in the year- ago period.

However, the personal care segment, which grew eight per cent, saw demand for skin, oral and hair care products slow further after growing 12 per cent in the previous quarter and 12.7 per cent in the same period a year earlier.

Kotak Securities FMCG analyst Ritwik Rai said that the revenue numbers broadly came in line with the expectations, with 3 per cent volume growth. However, EBITDA at four per cent is ahead of expectations and also the profit from the beverage segment surprised while personal products profit growth was weak.

"Overall, we have mixed results. While profit is ahead of expectations, the out- performance has been enabled by weaker investment in brands, weakness in net from personal products is an area of concern. The segment accounts for about 45 per cent of the company's profits," he said.

Courtesy: Mail Today