Hindustan Unilever Ltd (HUL) beat profit estimates in the fourth quarter despite unprecedented inflation. The FMCG major’s standalone net profit rose 8% to ₹2,327 crore for the quarter ended 31 March, 2022. It was ₹2,143 crore in the same period of last year.
The profit was higher than the average profit forecast of ₹2,200 crore by analysts in a Bloomberg survey.
Consumer goods companies across India are battling a demand slowdown and intense inflation stoked by record energy costs, broken supply chains and the war in Ukraine. Most, including Hindustan Unilever, have resorted to increasing the price of household staples from cookies to milk in a bid to to protect margins and pass on some of the pain to buyers.
Hindustan Unilever said operating margins at 24.6% remained healthy even as costs soared.
The Indian arm of global consumer goods giant Unilever Plc reported 10% growth in net sales at ₹13,190 crore for the period under review. The company’s board has recommended a final dividend of ₹19 for FY22.
On Wednesday, HUL shares closed 0.37% lower at ₹2,140.50 apiece on NSE.
“In challenging circumstances, we have grown competitively and protected our business model by maintaining margins in a healthy range. I am also pleased that we have become a ₹50,000 crore turnover company in this fiscal. Our consistent performance is reflective of our strategic clarity, strength of our brands, operational excellence, and dynamic financial management of our business,” said HUL CEO and Managing Director Sanjiv Mehta.
HUL reported an EBITDA (earnings before interest, tax, depreciation and amortisation) of ₹3,245 crore during the March quarter, higher by 10% over last year quarter.
Segment wise, Home Care growth at 24% was broad based with strong performance in Fabric Wash and Household Care. Both categories grew in strong double-digits with all parts of the portfolio performing well.
The company said it sees a challenging operating environment in the near future with Inflation impacting volumes and growth will predominantly be price-led.
“While there are near term concerns around significant inflation and slowing market growth, we are confident of the medium to long term prospects of the Indian FMCG sector and remain focused on delivering a Consistent, Competitive, Profitable and Responsible growth,” Sanjiv Mehta said.
Beauty & Personal Care grew competitively at 4%. Skin Cleansing delivered double digit growth driven by pricing and led by strong performance in ‘Lux’, ‘Dove’ and ‘Pears’. Hair Care continued its strong competitive performance in the quarter with all brands gaining shares.
“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 filing.