The company’s stock slumped 4% after the results before closing the day 2.13% lower at ₹2,410 on the BSE.
“Macro trends are favourable, and we are seeing an uptick in consumer sentiment and demand,” HUL managing director Priya Nair said. “Macro forces in the country, whether you look at the reasons being low overall food inflation and reforms, whether it is GST or the direct tax benefits, we are seeing macro conditions improving.”
The country’s leading consumer products maker reported net sales of ₹16,235 crore for the third quarter while its profit before exceptional items rose 1% to ₹2,562 crore, weighed down by a one-time gratuity charge of about ₹110 crore. Excluding that, underlying profit rose about 4%.
AgenciesAnalysts polled by Bloomberg had estimated HUL’s consolidated revenue at ₹16,156 crore and net profit at ₹2,597 crore.
Volume growth rose 4%. HUL’s value sales growth has been swinging between near-flat and 4% for over two years. The company said growth in the next financial year is likely to exceed the current year with volume-led expansion remaining the top priority.
Nair said rural markets continue to outpace urban areas amid lower food inflation and higher disposable income. While policy measures helped lift sentiment, the impact on volumes is expected to play out over a long period rather than through an immediate spike in demand, she said. Earnings before interest, tax, depreciation and amortisation (Ebitda) increased 3% to ₹3,078 crore, while margins fell 70 basis points year-on-year to 23.3%, after the maker of Surf and Brooke Bond reduced prices in its home care and tea businesses to regain share from competition and pass on lower commodity prices to customers.
The quarterly performance excludes the ice cream business, which was demerged during the quarter as part of an ongoing portfolio reshaping.
Reported net profit for the quarter surged 121% to ₹6,063 crore on exceptional gains, including the ice cream demerger and valuation benefits from newer investments such as Oziva and Minimalist.
“Our biggest opportunity as a company lies in scaling and democratising segments and benefits. So we have defined some key priorities for each of our categories, which we will really scale and double down,” Nair said, reiterating the company’s focus on fewer, bigger bets and category expansion, including scaling liquid detergents, premium personal care formats and digitally native brands.
HUL approved the acquisition of the remaining 49% stake in nutrition brand Oziva for ₹824 crore to strengthen its health-and-wellbeing play.