Hindustan Unilever reports 18 per cent growth in net profit

Hindustan Unilever Ltd (HUL), the country's largest consumer goods maker, on Monday reported an 18 per cent year-on-year increase in net profit for the third quarter of the current fiscal, and a 16 per cent expansion in sales.

The scrip, which has gained more than 20 per cent over the past six months, was, however, down 3.5 per cent on the Bombay Stock Exchange. It closed the day at Rs386.7.

HUL's net profit for the October-December quarter rose to Rs753.81 crore from Rs637.51 crore in Q3 of the previous fiscal. Total income shot up to Rs5,937 crore, from Rs5,127 crore.

"We have delivered another strong quarter of competitive growth with improvement in margins," said Harish Manwani, chairman, HUL. "The results, delivered against a backdrop of an uncertain economic environment, are reflective of the strength of our brands, consistency in our strategy and relentless focus on execution."

Sales volume grew 9.1 per cent, as compared to 9.8 per cent in Q2 of the fiscal. "Global uncertainty and local factors have adversely impacted consumer sentiment in the quarter," added R. Sridhar, chief financial officer. ''The competitive intensity in an attractive market like India will continue to grow. Also, the inflationary pressures, which we have been witnessing, will rise and the volatility in commodity costs front will remain."

HUL reported a 21 per cent growth in sales of soaps and detergents, which account for 45 per cent of its total revenues. Its operating margins were up by 230 basis points. But the company reported a seven per cent fall in advertising and promotional spending.