Cash ban singes HUL, sales dip 1% to Rs 8,318 crore

Mumbai: Hindustan Unilever posted a 1 per cent decline in net sales, which the maker of Rin and Lux attributed to the squeeze in liquidity that reduced trade pipelines and lower consumer offtake.

Net sales during quarter ended December was Rs 8,318 crore compared with Rs 8,385 crore a year ago. Net profit grew 7 per cent to Rs 1,038 crore.

The country's largest consumer goods company, whose presence in a range of daily consumption items such as soaps, shampoos and food makes its performance a good proxy for consumer sentiment.

“The gradual recovery of the market was temporarily impacted by adverse liquidity conditions. However our performance demonstrated resilience and agility in this challenging environment. There are early signs of normalisation and our focus continues to remain on innovation led volume growth and improvement in margins," Harish Manwani, Chairman at HUL said.

In November, Rs 500 and Rs 1000 bank notes were eliminated that accounted for over 80 per cent of that country’s currency in a cash-dominated economy.

EBITDA margin was down 70 basis points while cost of goods sold was higher by 60 bps due to rising input costs.

The company said the impact was varied across segments, channels and geographies and it responded to adverse market conditions with speed by rejigging supply chain, supported channel partners by extending credit and enhanced direct distribution coverage.