Hindustan Unilever (HUL), the country’s largest consumer goods maker, continued to disappoint the market with a muted volume growth of 3 per cent in the fourth quarter of fiscal 2013-14 compared with 4 per cent in the corresponding year-ago period, as consumer sentiments remained weak due to the sluggishness in the economy.
The company’s volume growth has been subdued in the last six-seven quarters. However, in the quarter ending March 31, 2014, sales and profits went up, beating street estimates.
While the profit-after-tax (PAT) was up 11 per cent at ₹872 crore, domestic sales improved by 9 per cent to touch the ₹7,000-crore mark.
R Sridhar, CFO, said that, overall, the fast moving consumer goods (FMCG) market has been experiencing a slower growth in the last few quarters, both in terms of volume and value, particularly in the premium and discretionary categories.
The input costs, he said, had gone up substantially, by almost ₹50 crore to ₹400 crore.
‘Ahead of market’ “Despite all that, the company’s performance was ahead of the market. We have grown profitably, sustainably and in a competitive manner,” he said.
But, in the same breath, the company cautioned that the market is not going to improve in the short term.
“In the medium to long term, we are confident that India offers a huge opportunity for growth. There is no category in our portfolio that has matured, so there is enough headroom for growth,” said CEO Sanjeev Mehta.
“Growth has slowed if we compare it with 2012 or 2013 levels. Our game is to grow ahead of the market, spend competitively and grow the brands.
“We want to ensure that our investments are not just behind the core, but developing nascent categories and also improve margins,” Mehta added.
For HUL, premium categories have fared well with double-digit growth. The maker of brands such as Dove, Ponds, Tresemme, Fair & Lovely and Sunsilk shampoo saw increased demand coming from the skin-care category.
The company reported growth across categories — soaps and detergents, 9.6 per cent; personal products, 8.3 per cent; beverages, 7.5 per cent; and foods category, 12.7 per cent.
HUL shares ended unchanged at Rs 580.60 on the BSE on Monday.