HUL bottomline declines 22 per cent

Hindustan Unilever Ltd (HUL), the country's biggest household products manufacturer, has reported a net profit of Rs 408.06 crore for the third quarter ended September 30, against Rs 520.74 crore in the corresponding period last year.

Profit in the previous corresponding period was higher mainly due to a one-time tax gain amounting to Rs 137 crore in the year-ago period.

A lock-out at HUL's Assam factory that affected production of shampoo and toothpaste was also responsible for the lower-than-expected performance in the September quarter.

A Bloomberg survey expected a profit of Rs 442 crore, while a similar poll by Reuters put profit expectations at Rs 443 crore on net sales of Rs 3,478 crore.

Total income during the period rose 9.7 per cent to Rs 3,470 crore in the quarter, from Rs 3,163 crore in the previous corresponding period with a rise in all principal segments of the home and personal care divisions as well as the food business.

Soaps and detergents registered a particularly better growth of 13 per cent.

HUL relaunched Fair and Lovely, Clinic All Clear, Lux Crystal Shine and introduced the Lakme 9-5 range in the personal care category in this period.

The foods business grew by 17 per cent.

The company relaunched the Knorr soup range in this period.

HUL's water purifier product Pure-it aggregated three million consumers across eight states, including Delhi and Uttar Pradesh where it was launched this quarter.

The shutdown at the Doom Dooma factory, which makes about a quarter of HUL's personal care products, particularly hurt the skin and toothpaste categories.

Anand Shah, research analyst at Angel Broking, said HUL had suffered margin pressure in personal products, ice-cream and exports. It would face pressure to keep its market share in the skin and oral care segments, where it competes with Colgate-Palmolive, Procter & Gamble, Dabur India and ITC.

Chairman Harish Manwani said, FMCG demand continued to be strong in both urban and rural markets. "The soaps and detergents, beverages and processed foods segments have performed well and we have broadly sustained our market shares across categories."

Material cost inflation remained a concern and the company intends to manage this through aggressive cost effectiveness and judicious price increases.

The HUL stock closed 5.21 per cent down (or Rs 11.40) at Rs 207.60 on the Bombay Stock Exchange on Wednesday.