HUL posts 10% growth in Q1 PAT at Rs 1,174 cr on growth across all segments

New Delhi: FMCG major HUL Monday reported a 9.79 percent increase in its standalone net profit at Rs 1,173.90 crore for the first quarter ended June, driven by growth across all segments and improvement in margins.

The company, which also announced investment of about Rs 1,000 crore to set up a new manufacturing unit at Doom Dooma in Assam, had posted a net profit of Rs 1,069.16 crore in April-June quarter of the previous fiscal.

Hindustan Unilever’s net sales were up 3.56 percent at Rs 7,987.74 crore during the quarter under review as against Rs 7,712.71 crore a year before, the company said in a statement.

“Net profit at Rs 1,173.90 crore was up 10 percent, aided by a one-time writeback of provision for pension benefits arising from plan amendments,” the company said.

Its lower input costs led to 100 bps reduction in cost of goods sold, and brand investments were maintained at competitive levels across segments.

“During the quarter, against the backdrop of a challenging environment where market growth further slowed in both volume and value terms, the business continued to track ahead of market with sustained margin improvement,” said HUL in a statement.

“Domestic consumer business growth was at 4 per cent, with 4 per cent underlying volume growth and operating margin expansion by 70 bps. The growth was broad-based across segments.”

Expenses in the period went up 2.78 percent to Rs 6,585.58 crore as against Rs 6,407.39 crore a year ago.

HUL Chairman Harish Manwani said: “In slowing market conditions, the business is tracking ahead of the market with sustained margin improvement. We continue to make progress on our priorities of strengthening the core of our business while driving operational efficiencies.”

He further said: “While the near-term market growth is likely to remain muted, we are optimistic for the medium term and remain focused on driving competitive and profitable growth.”

HUL’s revenue from the home care segment was up 6.77 percent at Rs 2,559.64 crore during the quarter as against Rs 2,397.24 crore in the previous period, led by healthy volumes.

“In fabric wash, growth was driven by the premium segment with Surf, the largest brand sustaining its strong growth momentum. In household care, Vim liquids continued to do well while in the water (segment), the strategic interventions taken to play in the wider market are starting to deliver,” said HUL.

In personal care space, HUL’s revenue was up 2.13 percent at Rs 3,898.60 crore as against Rs 3,817.10 crore. It was affected by “offset by deflation”.

“In personal wash, Lifebuoy, Pears and Dove led category volume growth while in skin care, growth was led by the premium segment with BB and CC creams delivering strong growth. Hair care registered another quarter of volume-led growth, with all key brands continuing to perform well,” it said.