FMCG major Hindustan Unilever posted an increase of 15.5% in net profit at Rs 871.36 crore for the third quarter ended December 31, 2012 from Rs 753.8 crore on year.
During the quarter the domestic consumer business grew at 15% with volume growth of 5%. Both home and personal care (HPC) and foods and beverages (F&B) registered double digit growth, said the company.
Revenue for the quarter was up 12.5% at Rs 6,788.54 crore from Rs 6,035.6 crore.
Laundry delivered a strong performance across formats, and registered a growth of 20%. Products like Surf and Rin continued to drive category upgradation, clocking another quarter of double digit growth. The revenue for the quarter was Rs 3,171.23 crore.
Harish Manwani, Chairman said: “In an environment that continued to be challenging, we have delivered another quarter of board growth and margin expansion. The business is consistently winning in the marketplace by remaining sharply focused on the needs of our large consumer base and leveraging Unilever’s strong global innovation pipeline.”
Personal products grew 13% to report revenue of Rs 2048.9 crore. Growth in this segment was driven by Fair & Lovely, Dove and Ponds Age Miracle among others.
Tea delivered one of its strongest quarters with double digit growth across all brands at the premium and popular end. In coffee, Bru sustaines its growth momentum. Beverages grew 18% during the quarter.
The company said that operating climate remains challenging with input costs holding firm and high competitive intensity. A&P was stepped up and maintained at competitive levels, higher by 132 crore (+ 100 basis points) in the quarter.
Shares of fast moving consumer goods (FMCG) giant Hindustan Unilever (HUL) witnessed a knee-jerk reaction in the later part of the trading session as the company's board approved a royalty of 3.15%.
On the BSE, stocks of HUL traded at Rs 470, down 5.5%. The current royalty stands at 1.4% of the turnover. The company plans to increase the royalty in a phased manner till March, 2018.
According to the company officials, in the next financial year 2013-14, the royalty will stand at 1.9%, 50 basis points higher than the current royalty payment.
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HUL disappoints street
Hindustan Unilever (HUL), a leading fast moving consumer goods (FMCG) giant, disappointed the streets on Tuesday as it could not beat the estimates. Against net profit estimates of Rs 900 crore for the quarter ended 31 December, HUL could clock profitability of Rs 871 crore.
Though it was higher, in terms of year-on-year (y-o-y) basis. The reported net profit stood 15.6% higher than what the company witnessed in the previous corresponding quarter. However, markets gave the counter a thumbs down. At one point of time, as a knee-jerk reaction the counter nose-dived close to 6% or Rs 30 to close at Rs 465 a share on the BSE. However, it managed to cut its losses by the time trading session was closed. The counter finally closed at Rs 481.55, down 2.88% on the stock markets.
Apart from lower than estimated profitability, what irked the market was the hiked royalty the company would be paying to the parent entity. The company's board approved the royalty of 3.15% of turnover effective from February, 2013. Currently, royalty payment stands at 1.4% of turnover. HUL plans to increase the royalty from 1.4% to 3.15% in a phased manner till March, 2013. Taking this into account, the royalty for the coming financial year or 2013-14 would stand at 1.9%, up 50 basis points from the current levels.
On the operating margin front, HUL continued to continue its consistent gain. For the December quarter the operation margins improved by 40 basis points.
During the quarter, the total turnover of the company stood at Rs 6,788 crore, up 12.5% against Rs 6,035 crore in the previous corresponding quarter.