HUL posts 8% rise in Q1 net profit; volumes still muted

Net profit climbs to ₹2,472 crore; company cautious about near-term operating environment

- Suneera Tandon & Gaurav Laghate

Hindustan Unilever Ltd (HUL), the largest household goods maker in India, reported an 8% increase in profit in the June quarter as it intensified advertising and marketing expenses to tackle rising competition. However, the results slightly missed street expectations.

Net profit climbed to Rs2,472 crore for the three months ended 30 June from Rs2,289 crore a year ago, the company said in a statement to the stock exchanges on Thursday.

Standalone sales rose 6.1% to Rs15,148 crore from Rs14,272 crore a year earlier; advertising and promotion spending during the quarter was up 11.52%. A Bloomberg survey of analysts expected it to report profit of Rs2,624.5 crore.

HUL’s gross margin expanded by 256 basis points (bps) from a year earlier and 120 bps sequentially to 49.9%. The company posted volume growth of 3%, against 4% in the March quarter. A basis point is one-hundredth of a percentage point.

Overall, the company sounded caution for the near-term operating environment, which “continued to be volatile with weather-related risks". HUL will remain “watchful" on the progress of the monsoon in the rest of the country and the impact of El Niño on rural demand.