“We are absolutely sure we are not losing market share,” outgoing CEO & MD of Hindustan Unilever Sanjiv Mehta said, the company having gained market share in about three-fourths of its business in FY23.
Mehta was discussing the FMCG company’s quarterly and annual results with the media, his last interaction as he will be stepping down on June 26. He said that apart from gaining market share, the company was also focused on improving its margins. “We have added ₹8 000 crores to our topline in this fiscal with volume growth in mid-single digits despite a decline in FMCG market volumes, he said, adding that this was an indicator of its strong performance.
Hindustan Unilever reported a net profit of ₹2,552 crore in the March quarter, up 9.7 per cent on year, while revenue rose 10.6 per cent to ₹14,893 crore on an underlying volume growth of 4 per cent on year, lagging estimates.
The EBITDA in the March quarter was at ₹3,471 crore, up 7 per cent on year, while the EBITDA margin contracted 90 basis points to 23.7 per cent. The gross margin rose 1 percentage sequentially to 48 per cent as costs came down.
Its growth in the March quarter came from the home care segment with a 19 per cent rise in revenue at ₹5,638 crore. The beauty and personal care segment, saw revenue growth of 10 per cent. The BPC segment margin was higher at 26 per cent compared to the 19 per cent seen in the home care segment.
The food and refreshment segment saw a revenue growth of 3 per cent and reported margin of 18 per cent.
Mehta said that while the rural market was yet to pick up, due to persistent consumer inflation, the rate of deceleration in rural market volumes was going down, giving hopes of a recovery in the near term.
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As expected, the company did step up its spending on advertising and sales, which was at 9 per cent of sales, compared to 8 per cent in the December quarter. Stepping up ad spends in the near term was one of its priorities, Mehta said, adding that it was a function of its marketing reach and competitive intensity.
For FY23, the company reported a net profit of ₹9,962 crore, up almost 13 per cent on year, while revenue was 15.5 per cent higher at ₹59,144 crore. The underlying volume growth was 5 per cent for the year.
Both fabric wash and household care grew in strong double digits during the reporting quarter. Premium portfolio continued to outperform driven by effective market development actions, the company said.
He added that the near-term operating environment was likely to remain volatile. With inflation easing and sequential softening in a few commodities, “price and volume growths will rebalance. Market volumes will recover gradually as consumption habits readjust,” he said.
The company has also declared a final dividend of Rs 22 for the year.