NEW DELHI: India’s largest packaged consumer goods company, Hindustan Unilever, on Tuesday reported a 7.1% year-on-year jump in its June quarter net profit to ₹1,881 crore.
Revenues rose 4.4% during the period to ₹10,560 crore year, led by growth in part of its packaged food, tea and coffee portfolio, apart from a pick-up in sales of its health and hygiene brands even as the disruptions caused by covid 19-lockdowns upended business for India's fast moving consumer goods makers.
The maker of Lux and Dove soaps, Surf detergents, Kissan ketchup and Lipton tea had reported a profit of ₹1,755 crore in the year-ago period.
HUL's June quarter earnings beat estimates.
A Bloomberg poll of 13 analysts had estimated the company’s quarterly revenue at ₹9979.90 crore (13 brokers) and net income ₹1721.60 crore (9 brokers).
Domestic consumer growth (excluding impact of merger with GSK CH India) was down 7%, the company said.
“In a challenging context of covid-19 disrupting markets and operations, HUL delivered a resilient performance... Health, Hygiene and Nutrition constituting 80% of our portfolio delivered healthy mid-single digit domestic consumer growth. The integration of GSK-CH’s nutrition business with us was done seamlessly with good performance on both growth and margins," the company said in an earnings release.
HUL’s quarterly earnings are a bellwether for India’s consumption economy.
Sales of its detergents, soaps, packaged tea and shampoos that reach millions of households help gauge consumer demand which took a beating as the pandemic prompted consumers to disproportionally spend on categories such as health and hygiene while postponing beauty and personal care spends. Moreover, India’s protracted lockdown caused disruptions for several makers of consumer products.
Standalone segment revenue at the company's food and refreshment business held strong, posting over 50% growth, while beauty and personal care was down 12%. Segment revenue across home care was down too during the quarter.
Among several categories that the company operates in, skin cleansing led by Lifebuoy delivered strong double-digit growth across formats as covid-19 drove sales of personal hygiene products. "We have significantly stepped up capacities in both hand wash and hand sanitizers to meet the consumer needs," the company said.
Moreover, in-home consumption of packaged foods helped foods, tea and coffee deliver strong performance with double digit growths.
Sanjiv Mehta, chairman and managing director, HUL, said while agility in operations, excellence in execution, and a strong balance sheet helped the company in a challenging quarter, near-term demand outlook remains uncertain.
“While constraints continue due to restrictions in several parts of the country and the near-term demand outlook remains uncertain, we remain well positioned to drive competitive, profitable, and responsible growth. The long-term structural opportunity of FMCG in India also remains intact," he said.