Market share gains propel HUL Q3 net profit 17% to ₹2,243 cr

Hindustan Unilever (HUL) reported a 16.7% rise in standalone net profit for the quarter ended December 31, 2021 at ₹2,243 crore as market share gains across divisions and price segments bolstered business fundamentals. The FMCG major had reported a net profit of ₹1,921 crore for the corresponding quarter last fiscal.

The company saw a 10.42% growth in sales during the quarter under review at ₹12,900 crore, as compared to ₹11,682 crore in the year-ago period. Total income rose 10.23% to ₹13,183 crore at the end of three months to December 2021 from ₹11,959 crore in the same period of the previous year.

EBITDA margin stood at 25.4%, improving 100 bps on annual basis. Profit after tax before exceptional items at ₹2,292 crore was up 17%.

“In the context of unprecedented inflation, we continue to manage our business dynamically driving savings harder across all lines of P&L and taking calibrated pricing actions using the principles of net revenue management. We continue to invest competitively behind our brands,” HUL said in a regulatory filing on Thursday.

The home care segment recorded 23% growth, broad based with strong performance in fabric wash and household care. Fabric wash grew in strong double-digits with all parts of the portfolio performing well. Household Care sustained its robust performance and grew in the high teens on a strong base. Calibrated price increases were taken across Fabric Wash and Household Care portfolios to partly offset the significant inflation in input costs, the company said.

Meanwhile, beauty and personal care grew 7%, mainly on the back of skin cleansing, skin care and colour cosmetics. Skin cleansing delivered double-digit growth driven by strong performance in Lux, Dove and Pears brands. The remaining two segments also delivered double-digit growth, reaching pre-Covid-19 levels. HUL’s hair care segment had a steady quarter enabled by strong performance in the premium portfolio.

Foods and refreshment grew 3% on a very high prior year comparator, driven by solid performance in tea and ice-creams, HUL said. Both continued their robust performance and grew competitively on a strong base, delivering high teens 2Y CAGR. Health food drinks saw handsome market share and penetration growth due to market development actions. Foods segment grew on a strong base led by jams and ketchup.

“Business fundamentals remained strong with handsome market share gains in all our divisions, both urban and rural markets and across price segments. Underlying volume growth at 2% was significantly ahead of the market,” the company said.

“In the near-term, operating environment will continue to remain challenging. In this scenario, we will manage our business with agility, continue to grow our consumer franchise whilst maintaining our margins in a healthy range. We remain confident of the medium to long term potential of Indian FMCG sector and HUL’s ability to deliver a consistent, competitive, profitable and responsible growth,” said Sanjeev Mehta, chairman and managing director of HUL.