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Hindustan Unilever Ltd’s Q2 profit jumps 8.7%; says worst is over
Net profit rose to ₹2,009 crore for the three months to September from ₹1,848 crore a year ago. Revenue for the quarter increased 16% to ₹11,442 crore from ₹9,852 crore.
Hindustan Unilever Ltd (HUL) on Tuesday said the worst of the fallout from the coronavirus pandemic is over as India’s largest household goods maker reported an 8.7% increase in quarterly profit.
The maker of Lifebuoy soaps said rural markets have emerged stronger but warned that demand in urban markets could take a while to recover.
Net profit rose to ₹2,009 crore for the three months to September from ₹1,848 crore a year ago. Revenue for the quarter increased 16% to ₹11,442 crore from ₹9,852 crore.
“Growth in the quarter was competitive and profitable with reported turnover growth of 16% and domestic consumer growth (excluding the impact of the acquisition of the Horlicks and Boost brand portfolio, and acquisition of ‘VWash’) of 3%,” the company said in a statement.
There is “very clearly an improvement between the June quarter and the September quarter”, Sanjiv Mehta, chairman and managing director, told reporters. Hindustan Unilever, with its wide range of products spanning beauty and personal care, packaged foods and home cleaning goods, is a proxy for India’s household consumption.
“The economic outlook has improved given the various initiatives taken by the government and the Reserve Bank of India. In our sector, rural markets have been resilient, but the demand in urban India, especially in metropolitan cities, has been muted. We believe that the worst is behind us and we are cautiously optimistic on demand recovery,” Mehta said in a press statement.
The management said the urban growth outlook appears uncertain given the migration of millions and job losses.
Mehta said true consumption-led growth would be visible in the December quarter.
The company’s business in the June quarter was dented as India’s strict lockdown implemented in March crushed out-of-home consumption and impacted sales of discretionary beauty and personal care products. But it also benefitted part of its foods and personal hygiene business. In the June quarter, the company had reported a 7% year-on-year decline in its domestic business.
The company’s growth for the September quarter was led by strong performance in its foods and refreshment business that reported a 19% sales growth—excluding the impact of the GSK merger—particularly tea and coffee, which registered double-digit growth.
