Indian consumer product companies are likely to report a growth in profit in the quarter ended December thanks to price hikes and higher sales from festivals and new launches.
The sector, collectively, is expected to report 15-17% growth in sales and 18-22% rise in net profit, according to an average estimate based on five analysts’ projections.
Net profit at Hindustan Unilever Ltd (HUL), the country’s leading consumer products maker, is likely to grow by about 14% to Rs550.16 crore in its fourth quarter, backed by pickup in its personal-care portfolio (owing to early winter) and steady growth in its soaps and detergents segment. “HUL has taken 5-7% price hikes in toilet soaps and detergents despite the entry of a stronger competitor to protect their margins,” notes Anand Shah, an analyst at Angel Broking Ltd.
Rival ITC Ltd is likely to report that its profit rose 13% to Rs809 crore as it entered new categories, such as soaps and shampoos, up from Rs717.4 crore in the year-ago period. “Non-cigarette business is expected to post revenue growth of more than 50% buoyed by nationwide launch of Bingos. All food segment brands—except Bingos—are expected to achieve a break-even in FY08 itself,” says Sameer Deshmukh, analyst, IL&FS Investsmart Securities Ltd.
Marico Ltd, which owns brands such as Parachute hair oil and Saffola edible oil, is expected to report net profit of Rs42 crore, up from Rs30.7 crore in the year-ago period, a growth of 34%, owing to robust sales and margin expansion in the international markets. For Godrej Consumer Products Ltd (GCPL), the forecast for profit growth is 24% at Rs45 crore.
“We expect GCPL to launch new variants in existing products and launch new products to ward off competition,” said Amnish Aggarwal, a senior analyst at Motilal Oswal Securities Ltd, in a report.
The average estimate on net profit for Dabur India Ltd, which owns brands such as Real juices and Chyawanprash, is Rs91.5 crore, up 27.5% from a year-ago period, owing to new launches.