HUL Q2 net up 8.13% despite subdued demand

FMCG major Hindustan Unilever Ltd (HUL) on Monday reported a 8.13 per cent increase in standalone net profit at Rs 988.16 crore (Rs 9.88 billion) for quarter ended September 30, 2014-15 as subdued demand continued to impact the sector.

The company reported net profit of Rs 913.8 crore (Rs 9.13 billion) in the corresponding period a year ago, the company said in a BSE filing.

HUL's net sales during the quarter stood at Rs 7,465.54 crore (Rs 74.65 billion), up 10.64 per cent compared with Rs 6,747.2 crore (Rs 67.42 billion) during the same period last year.

Commenting on the quarterly result, HUL Chairman Harish Manwani said: "In a low growth environment, our emphasis on market development and innovations have helped deliver another quarter of double digit growth and a healthy improvement in operating margins."

Meanwhile,HUL CFO P B Balaji told reporters that the demand for FMCG products continues to remain soft and despite headwinds, the company has delivered competitive growth.

"There is a lag of 2-3 quarters between economic indicators such as GDP and inflation numbers improving and sale of FMCG products."

"We remain positive about our medium to long-term growth outlook." Balaji added while the company continues to invest in its core categories, it is developing emerging categories such as hand wash, face wash, fabric conditioner and green tea for future.

Overall expenses in Q2 stood at Rs 6,473.68 crore or Rs 64.73 billion, as against Rs 5,871.25 crore (Rs 58.71 billion) in the year-ago period. HUL's tax expense went up sharply by 46.16 per cent to Rs 417.64 crore (Rs 4.17 billion) compared to Rs 285.73 crore or Rs 2.85 billion) in the corresponding period a year ago.

During the quarter, revenue from soap and detergents increased by 9.86 per cent to Rs 2142.74 crore or Rs 21.42 billion and personal products by 7.62 per cent to Rs 899.13 crore.

Revenue from beverages grew by 7.62 per cent to Rs 899.13 crore and packaged food increased by 13.40 per cent to Rs 451.31 crore or Rs 4.51 billion.

Quarterly revenue from others, which includes exports, water and infant care, grew by 18.68 per cent to 361.8 crore. The HUL scrip was trading at Rs apiece in the afternoon trade, down per cent on the BSE.