Powered by a double-digit growth in home and personal care and foods businesses, FMCG major Hindustan Unilever Ltd (HUL) has recorded a 15 per cent growth in net profit at Rs 787 crore in the fourth quarter of the financial year 2012-13 compared to the year-ago period.
The net sales increased by 12.5 per cent at Rs 6,367 crore in the same quarter compared with Rs 5,660 crore in the corresponding period of the last fiscal.
HUL’s Chief Executive Officer Nitin Paranjpe said the company posted a strong underlying growth at six per cent at a time when the sector witnessed slowdown.
The contribution of home and personal care business was Rs 4,960.46 crore (Rs 4,402.60 crore) and that of foods business Rs 1,167.27 crore (Rs 1,014.36 crore). The operating profit grew 17.3 per cent to Rs 910.35 crore.
“All the segments across the product categories and price points have shown a good growth this quarter on the back of demand coming from all the channels of sales and markets. We continued to trend ahead of the market in this quarter,” Paranjpe said.
The company’s soaps and detergents grew 13 per cent. Skin cleansing delivered a robust performance with double-digit volume growth.
The company, which witnessed softening of commodity prices in the quarter under review, had passed on the benefits to the consumers not in terms of price reductions but through several offers and promotions.
Nitin Mathur, analyst at Espirito Santo, said the good volume growth number in a difficult macro environment, however, comes at the cost of significantly higher advertising and sales promotion (A&P) investments.
However, the question still remains whether the company's gross margin expansion will continue as the company has taken price cuts in March to boost volume growth and that will higher level of A&P investment erode operating margins going forward, he added.
For the entire financial year, the business grew 16 per cent with seven per cent underlying volume growth. Gross profit grew 28 per cent to Rs 3,314 crore, while net profit jumped 41 per cent to Rs 3,797 crore.
HUL has recommended a final dividend of Rs 6 for the financial year ended March 31, 2013, on equity shares of Re 1 each.
The company’s shares moved up seven per cent to close at Rs 497 on the BSE.