Mumbai: Hindustan Unilever Ltd (HUL), India’s largest household goods company, said quarterly profit rose 9% from a year earlier, the slowest pace in seven quarters.
Net profit rose to ₹1,444 crore in the three months ended 31 December from ₹1,325 crore in the year earlier. That was in line with the ₹1,455 crore average profit estimate of analysts polled by Bloomberg. Sales revenue rose 12.42% to RS 9,357 crore.
The company, which sells everyday brands such as Lux soaps, Pepsodent toothpaste and Kissan jam, reported a 10% volume growth in the quarter, indicating stable consumer demand. HUL’s earnings—usually the bellwether for India’s consumer goods companies—also helps gauge demand and monitor consumer sentiment.
Chairman and MD Sanjiv Mehta said the company is keeping a close watch on the macroeconomic environment and “will respond with agility". He expects demand to remain stable in the near term.
HUL is in the process of completing the purchase of GlaxoSmithKline Plc’s Indian consumer business for R 31,700 crore in an all-stock transaction that will give it brands such as Horlicks, Boost and Viva. HUL’s management on Thursday said it hopes to complete the acquisition by the end of 2019.
The company is in the process of seeking approvals from stock exchanges and the Competition Commission of India. The management said it would apportion costs of the acquisition over the next couple of quarters. In the December quarter, restructuring expenses were ₹46 crore and acquisition and disposal-related costs were ₹16 crore.
Mehta said the rural market is growing 1.3 times faster than sales in urban areas.
“The very fact that the governments in many states were forced to waive the farm loans, that is certainly indicative of that. Even rains started well but many pockets in the country didn’t receive average rainfall," Mehta.
“The important factors are wage rates because not all are farm owners and wage rates have to move up to have more money in the hands of farmers. Also, the government had put in the intent of MSP and whether that gets effectively implemented in the market or not is yet to be seen."