)
Volumes, however, continue to be a challenge. During the quarter, the company reported three per cent growth in volumes, the lowest in two years. In the past three quarters, HUL’s volume growth has been four-five per cent. A year ago, volume growth was six per cent. Overall, net sales rose nine per cent to Rs 6,936 crore from Rs 6,367 crore in the year-ago quarter.
Chief Financial Officer R Sridhar said the market was challenging and growth across categories had slowed. “From double-digit growth a year ago, the overall consumer goods market growth is down to low single digits and this slowdown is visible across categories and channels,” he said.
Analysts tracking the company said they had factored in a volume growth of three-four per cent for the quarter. Ritwik Rai, consumer goods analyst at Kotak Securities, said, “HUL’s fourth-quarter revenue has broadly been in line with our expectations, with three per cent volume growth. At four per cent, Ebitda (earnings before interest, tax, depreciation and amortisation) was ahead of our expectations.”
To rein in operating expenditure, HUL cut promotional spending, primarily in categories such as soaps and detergents; as percentage of sales, ad spends were 12 per cent. In previous quarters, the ad expenditure has been 13-14 per cent. As a result of lower ad expenditure, profit before interest, tax and depreciation (Pbitd) saw higher growth. According to CapitaLine, the company reported Pbitd of Rs 1,294 crore, a 19 per cent year-on-year growth, the highest in at least five quarters.
Sridhar said the cut in promotional spends was on account of higher input costs of commodities such as palm oil, a key ingredient for soaps. In the past three months, palm oil prices have risen seven-eight per cent.
On Monday, HUL’s stock lost 0.08 per cent to touch Rs 580.25 just before close of trade on the BSE.
