Hindustan Unilever Ltd. on Thursday reported a marginal decline in consolidated net profit to ₹2,657 crore for the second quarter ended September 30 amid subdued rural demand and heightened aggressive depth.
The firm had posted a consolidated net profit of ₹2,670 crore in the identical quarter final fiscal, Hindustan Unilever Ltd. (HUL) mentioned in a regulatory submitting.
The consolidated complete earnings stood at ₹15,806 crore within the quarter below evaluation in contrast to ₹15,253 crore within the year-earlier interval, it added.
Its complete bills within the second quarter had been increased at ₹12,211 crore in opposition to ₹11,965 crore a 12 months earlier.
HUL mentioned its board had authorized an interim dividend of ₹18 per fairness share of face worth of ₹1 every for the monetary 12 months ending March 31, 2024.
“We delivered resilient and competitive growth whilst stepping up our EBITDA margin in a challenging operating environment, marked by subdued rural demand and heightened competitive intensity,” HUL CEO and Managing Director Rohit Jawa mentioned.
Addressing reporters in a digital earnings name, he mentioned, “It [the FMCG market] is recovering faster in urban and lesser in rural but it is recovering on a two-year basis. It sort of comes back to where it was.”
He mentioned rural and concrete poor customers with earnings constraints had to bear the brunt of excessive inflation. On the opposite hand, customers in metros and concrete areas with excessive incomes proceed to be resilient. On competitors, he mentioned the return of native gamers, who’ve vacated area within the mass and small packs segments, have intensified the strain.
Mr. Jawa identified that quantity restoration for HUL could be gradual.
HUL mentioned that in the course of the second quarter, its house care class grew 3% and cloth wash had mid-single-digit quantity progress, with the premium portfolio persevering with to outperform, whereas family care volumes grew in excessive single digits led by dishwasher.
Beauty and private care had a mid-single digit with volume-led progress. Revenue declined as additional worth reductions had been taken in soaps, it added.
The meals and refreshment class noticed mid-single-digit progress, pushed by pricing. Tea delivered modest progress because the class continued to witness customers downgrading whereas espresso grew in double-digits.
HUL CFO Ritesh Tiwari mentioned the corporate has elevated its promoting and promotional spending, reaching pre-COVID ranges, as margins have expanded.
In the second quarter, the corporate has stepped up promoting and promotional “investments by about ₹700 crore year-on-year”, he mentioned.
The firm’s spending on digital media for its premium merchandise has additionally elevated. Overall, HUL is spending one-third on digital and two-thirds on conventional media channels, he added.
On the outlook, Mr. Jawa mentioned, “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 identical time, he mentioned, “We need to be watchful of volatile global commodity prices as well as the impact of monsoon on crop output and reservoir levels.”
Besides, the present world geopolitical state of affairs, significantly in Israel, can be an element that wants to be watched out for, Mr. Tiwari mentioned.
Mr. Jawa mentioned HUL’s focus is to present superior worth to customers, drive aggressive quantity progress, and put money into its manufacturers.
“We remain confident of the mid to long-term potential of the Indian FMCG sector and HUL’s ability to deliver consistent, competitive, profitable and responsible growth.”
