Hindustan Unilever Limited (HUL) has dipped 5% to Rs 456, extending its previous day’s 3% fall after reporting a disappointing set of numbers for the third quarter ended December 31, 2012 (Q3).
The stock opened at Rs 452 and hit a low of Rs 447, its lowest level since July 2012, on BSE. A combined 6.05 million shares have changed hands on the counter in opening deals on both the exchanges.
The FMCG (fast moving consumer goods company) reported 15.6% year-o-year (yoy) growth in net profit at Rs 871 crore, mainly due to 85.5% increase in other income to Rs 355 crore. Net sales grew by 10.3% to Rs 6,434 crore on yoy basis.
The company recorded 5% underlying volume growth for domestic consumer business which was the lowest in the last three years. The operating profit margin (OPM) fell by 122 bps yoy to 13.5%, due to higher input costs and Rs132 crore of higher advertisement and promotion expenses.
Meanwhile, the board of directors of the company approved an incremental royalty payment of 1.75% of turnover payable to the parent group Unilever. Currently the company pays 1.4% of turnover as royalty, which will be increased to 3.15% based on a new agreement which would be effective from February 1, 2013.
