To boost demand, the company has also passed on lower input prices to consumers. Price deflation, and the phasing out of excise duty incentives, hit the company's sales and profit growth. Net sales grew a modest 4.7 per cent to Rs 7,819 crore, with an underlying volume growth of seven per cent. It reported a growth of 1.4 per cent in its net profit (before exceptional items), against the Bloomberg estimate of Rs 1,039 crore.
The company reported healthy growth in personal care products and packaged foods categories. Packaged foods grew 12 per cent year-on-year, while personal products were up nine per cent. Soaps and detergents grew a modest two per cent. The stress of rising competition is evident from the margin performance of the soaps and detergents segment. The segment's Ebit (earnings before interest and tax) margin declined 267 basis points sequentially to 12.8 per cent during the September quarter. It is a similar story for beverages, packaged foods, and personal care. Ebit margin in the personal care segment was down 355 basis points sequentially to 26.1 per cent during the quarter. According to KR Choksey, Hindustan Unilever's results were below expectation and the growth in the quarter continued to be hit by the phasing out of excise duty incentives and price deflation, as the benefit of lower commodity costs were passed on to consumers.