HUL, which outpaced the industry in value and volume sales, said it's "cautiously optimistic in the near term" of a demand revival led by softening in some commodities as well as monetary and fiscal measures taken by the government. Results met ex...
By ET Bureau | Updated:
ET Bureau & Agencies
Mumbai: Hindustan Unilever Ltd (HUL) posted 16% growth in sales in the September quarter from a year ago, driven by the homecare and personal care segment, while warning that the demand environment remains challenging with inflation impacting consumption.
Sales rose to ₹14,514 crore and net profit increased 20% to ₹2,616 crore, the country's biggest consumer goods company said on Friday.
HUL, which outpaced the industry in value and volume sales, said it's "cautiously optimistic in the near term" of a demand revival led by softening in some commodities as well as monetary and fiscal measures taken by the government. Results met expectations, with HUL gaining 2.11% to ₹2,655.05 at the BSE Friday close. The company declared an interim dividend of ₹17 per share.
HUL said there has been a slight improvement in volume sales sequentially, with that in September better than in the preceding two months. However, growth next quarter will continue to be price-led due to continued inflationary pressures.
"The headline numbers have improved, but volumes are still under stress," HUL managing director Sanjiv Mehta said at the post-earnings press conference. "We are cautiously optimistic that consumption will improve in near term, but it is dependent on a number of factors like easing of inflation, geopolitical tension, crude oil prices coming down, improvement in crop realisation and an increase in economic activities."
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Mehta said the key factor for FMCG consumption to grow will be the moderation of commodity prices. The company will start passing on the benefit of lower commodity prices, like it did for soaps last quarter due to the reduction in palm oil prices.
"Our net material inflation was 22% in the last quarter, which is significantly high," he said. "This will come down in the December quarter due to reduction in palm oil prices which still remain at much elevated levels."
Consumer inflation hit an all-time high in April in the wake of the Russia-Ukraine war as companies increased product prices by 15-20% or cut down pack sizes over the past year. In September, it spiked more than expected to a five-month high.
