HUL beats estimates, net profit up 19% 

FMCG major Hindustan Unilever Limited (HUL) on Friday reported a jump of 19% in net profit at ₹1,525 crore in the July-September quarter, beating the Bloomberg consensus estimate of ₹1,418 crore. The number was ₹1,276 crore in the year-ago period.

The jump in profit was on the back of robust numbers for its home care segment, it was reported. Revenue from this segment, which includes brands such as Vim and Surf Excel, rose 12.4% to ₹3,080 crore. Revenue from the beauty and personal care segment rose 10.38% to ₹4,316 crore.

The company’s net revenue from operations in the second quarter of the current financial year rose to ₹9,138 crore, from ₹8,199 crore in Q2 of FY18. Its domestic consumer business witnessed 12% sequential growth, on the back of 10% growth in volume.

“Our focus on strengthening the core, leading market development and driving excellence in execution has enabled us to deliver competitive and profitable growth,” chairman and managing director Sanjiv Mehta said. The company had also delivered a strong performance also for the half year, he said, adding that he expected consumer demand to be stable in the near term.

Urban and rural consumption demand has been stable in the period with the fading impact of the note ban and GST roll-out. Retail inflation in August eased to 3.69%, from 4.17% in July, according to data released by Central Statistics Office (CSO) last month.

Brokerage firm Motilal Oswal had said in a September 18 report that the FMCG major “will continue to see moderate operating margin expansion despite moderate inflation and high-ad spends”.

In Q2, HUL’s Ebitda (earnings before interest, tax, depreciation and amortisation) margin improved by 160 basis points, and Ebitda improved by 20% year-on-year to ₹2,019 crore.

The company’s board has declared an interim dividend of ₹9 per share for FY19, HUL said in a regulatory filing.

The company also announced the appointment of Leo Puri, 57, as an independent director on its board effective October 12. Until recently, Puri was the managing director of UTI Asset Management Company.

On Friday, the company’s shares closed 2.63% higher on the BSE at ₹1,568.65.