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Consumer goods major Hindustan Unilever (HUL) disappointed the Street by reporting a 0.2 per cent growth in net profit to Rs 1,059 crore. The growth was impacted by a one-time profit on sale of investments in the base quarter (June 2014), higher tax rate (31.7 per cent; up 280 basis points) and lower other income (it nearly halved to Rs 108.6 crore from Rs 202.1 crore last year).
Sales grew 5.3 per cent to Rs 7,973 crore, against Rs 7,570 crore a year-ago. Bloomberg consensus estimates had pegged net sales at Rs 8,310 crore and net profit at Rs 1,127 crore, implying the company had disappointed on both counts.
The stock tanked over two per cent on the BSE following announcement of results, closing the day at Rs 891.45 per unit.
The domestic consumer business grew five per cent, with six per cent underlying volume growth. While higher than the year-ago period (five per cent) and in-line with the fourth quarter (six per cent), volume growth was lower than the seven per cent that some analysts were estimating; others were expecting between five per cent and seven per cent.
Chief financial officer P B Balaji said, "The growth in the quarter was impacted by the phasing out of excise duty incentives and price de-growth, as the benefit of lower commodity costs was passed on to consumers."
