HUL’s June quarter net profit up 19% on higher volumes

Hindustan Unilever (HUL), the Indian arm of global consumer goods giant Unilever Plc, reported a 19% year-on-year rise in net profit to Rs 1,529 crore for the quarter ended June 30, led by higher volumes and cost control measures. The Mumbai-based company reported net sales of Rs 9,356 crore during the April-June period, up 3% over the same period last year. However, on a comparable basis (adjusted for the accounting impact post-GST), domestic revenue growth was in the region of 16%, and underlying volume growth was around 12%, the company said in its earnings release on Monday.

HUL, which makes products such as Kwality Wall’s ice cream and Lux soaps, saw a double digit volume growth across its business segments, including home care (20%), beauty and personal care (14%), and food and refreshment (14%).

“In the near term, we see gradual imrpovement in demand and our focus will continue to be on innovations and market development,” Sanjiv Mehta, chairman and MD of HUL, said in the statement.

HUL reported an Ebitda (earnings before interest, tax, depreciation, and amortisation) of Rs 2,251 crore for the June quarter, with an Ebitda margin of 21%, which was a 100 basis points year-on-year rise (on a comparable basis before accounting for the new GST norms).

Mehta cautioned that volatility in crude oil prices and currency fluctuation (with the rupee depreciating sharply against the dollar) will pose key risks to the business going forward, which HUL expects to manage through operational efficiencies.

On a day when the stock market closed in the red, HUL’s share prices gained on the bourses, ending Monday’s trade at Rs 1,753.85 per share, up 0.73%. The bourse’s benchmark index, S&P BSE Sensex ended at 36,323.77 points, down 0.60%.