FMCG major Hindustan Unilever Ltd beat market expectations and posted a standalone net profit of ₹1,018 crore for the March 2015 quarter, an over 16 per cent rise from the ₹872 crore reported in the same period last year. The profits were driven by lower inputs costs and volume growth.
HUL’s domestic consumer business grew at nine per cent, with six per cent underlying volume growth. Input costs fell by 310 basis points year-on-year due to lower commodity prices. The company said it had to cut prices by five-six per cent across segments to maintain revenue and market share. The bottomline was supported by exceptional gain of ₹179.4 crore (against ₹ 66 crore Y-o-Y) from the sale of properties.
Total income from operations crossed the ₹30,000-crore mark for the full year 2014-15, a landmark for the detergents-to-packaged foods manufacturing company. For the quarter, revenues stood at ₹7,675.63 crore compared with ₹7,094 crore earlier.
By segments, for the March quarter, income from soaps and detergents grew five per cent to ₹3,673 crore year-on-year; personal products grew 13 per cent to ₹2,250 crore, income from beverages was up 12 per cent to ₹ 976 crore, while revenue from packaged foods rose 13 per cent to ₹476 crore.
Income from other segments (including exports, water purifying systems, infant car products) fell marginally (0.36 per cent) to ₹294.7 crore.
Regarding discretionary spending in rural India, the company said that while the rural market is growing faster than its urban counterpart, it would have to wait for another two quarters or so before seeing definitive trends emerge.
In a statement, brokerage firm Reliance Securities maintained its neutral view on the stock.
“HUL’s 4QFY15 results were a mixed bag vis-à-vis our estimates. While, revenue was in line with our expectations, earnings on a recurring basis were below expectations. Going forward, with all signs indicating lower growth from rural India, volume growth in sales will remain in the mid-single digits for HUL in FY16.”
The board of directors proposed a final dividend of ₹9 a share for the quarter. HUL had earlier paid an interim dividend of ₹6 a share last November.
Shares of HUL gained 3.34 per cent during trade on Friday, closing the day at ₹894.60.