At a time when Unilever, the world’s second largest consumer goods maker, blamed emerging markets, including India, for slower sales growth, its Indian unit, Hindustan Unilever Ltd (HUL), posted a net profit of Rs 913 crore in the second quarter, up 13 per cent from the comparative quarter of the previous fiscal. This was mainly due to good rural growth, innovation and re-launches, along with cost management.
Margins grew despite a 24 per cent increase in advertising spends to Rs 185 crore during the July-September quarter.
Unilever generates more than half its annual sales from developing and emerging markets, where sales rose 5.9 per cent in the quarter — lower than the 10.3 per cent growth in the previous quarter but stronger than the slight decline seen in developed markets.
The maker of brands like Dove, Lux and Ponds, posted 5 per cent underlying volume growth, beating analysts’ expectations. The overall domestic consumer business grew 10 per cent to Rs 6,445 crore during the quarter against Rs 5,875 crore.
“We have taken a lot of initiatives in the rural market that have translated into superior growth.” said Chief Financial Officer R. Sridhar.
He said that the personal products and packaged foods categories were impacted because of high inflation in food prices.
Despite that, the skin-care segment registered a fourth successive quarter of double-digit volume growth with Lifebuoy, Breeze and Lux leading the charge. Household-care also continued to do well with Vim and Domex growing in double digits.
“We have outperformed the market by investing in the business of tomorrow and building new categories despite the challenging environment,” said Chairman Harish Manwani
The company declared a dividend of Rs 5.5 per equity share for the year ending March 31, 2014.