FMCG major Hindustan Unilever Limited (HUL) released its second quarter earnings report on Thursday, which was largely in line with D-Street estimates. The board of HUL also declared an interim dividend of ₹18 per share for the year ended March 31, 2024. Ahead of Q2 results, HUL shares ended flat at ₹2,547.85 with a negative bias on the BSE.

For the July-September quarter of the financial year 2023-24, HUL posted a profit of ₹2,717 crore, up 3.86% from ₹2616 crore in the year ago period. The sales rose 3.53% to ₹15,027 crore in Q2FY24, from ₹14,514 crore a year ago.

“In the quarter, there was a one-off credit from favourable resolution of past indirect tax litigation benefiting both topline and bottomline,” HUL says in a release.

On the operating front, EBITDA rose 9% 3,694 crore in Q2 FY24 as compared to ₹3,377 crore in the corresponding period last year. The margin increased by 130 basis points (bps) to 24.6% from 23.3% in the same period last fiscal.

The operating profit climbed 9% to ₹3,425 crore versus ₹3,129  crore in the year ago period.

Rohit Jawa, CEO and Managing Director, says, “We delivered a resilient and competitive growth whilst stepping up our EBITDA margin in a challenging operating environment, marked by subdued rural demand and heightened competitive intensity.

 “Looking forward we remain cautiously optimistic. FMCG demand is likely to continue a gradual recovery with tailwinds from the upcoming festive season, sustained buoyancy of services and Government’s thrust on capex. At the same time, we need to be watchful of volatile global commodity prices as well as the impact of monsoon on crop output and reservoir levels.”

He further states that the company will focus on driving competitive volume growth and invest in brands. “We remain confident of the mid to long term potential of the Indian FMCG sector and HUL’s ability to deliver a consistent, competitive, profitable and responsible growth,” he adds.

Segment wise, home care business registered a volume growth of 3%, while beauty and personal care grew 4% during the quarter under review. In the beauty and personal care division, skin cleansing had a low-single digit volume growth with Lux and Hamam continuing to outperform. Revenue declined as further price reductions were taken in soaps. The company launched a new range of Vaseline moisturisers, Lakme serums and cosmetics, Pond’s serum, Indulekha anti-dandruff oil and shampoo during the quarter.

Meanwhile, foods & refreshment business grew 4% in terms of volume. Tea delivered a modest growth as the category continued to witness consumers downgrading. Coffee grew in double-digits. During the quarter, Horlicks Strength Plus, Slow Churn Ice Cream and new blends of Lipton Green Tea were launched.

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