HUL Q4 profit dips 1.53% to Rs 2,561 cr

FMCG major Hindustan Unilever on Wednesday reported a 1.53 per cent decline in consolidated net profit to Rs 2,561 crore for the fourth quarter ended March 31, 2024 due to factors such as deflation and softening of commodity prices.

The company had posted a net profit of Rs 2,601 crore in the year-ago period, according to a regulatory filing from HUL.

Net sales of Hindustan Unilever Ltd (HUL) were almost flat to Rs 15,013 crore in the March quarter.

While HUL's total expenses were up 1.15 per cent to Rs 12,100 crore in the March quarter from Rs 11,962 crore a year ago.

The total income of HUL during the fourth quarter of the previous fiscal was flat at Rs 15,441 crore as against Rs 15,375 crore a year ago.

"HUL delivered a resilient performance in Q4 with underlying sales growth of 1 per cent, underlying volume growth (UVG) of 2 per cent and EBITDA margin at 23.4 per cent," HUL said in its earning statement.

In the March quarter, HUL's gross margin improved 350 bps year-on-year and its advertising and promotional (A&P) investments increased 200 bps as it continued to step up investments on its brands.

However, HUL's "EBITDA at 23.4 per cent declined 30 bps primarily on account of 60 bps impact from termination of GSK consignment selling arrangement and investments in long-term capabilities".

During the quarter, HUL's home care segment grew 1.27 per cent to Rs 5,709 crore.

"Both fabric wash and household care grew volumes in mid-single digit driven by strong performance in premium portfolio.

"The category continued to witness YoY price decline on account of actions taken during the year," it said.

However, its beauty and personal care segment was down 2.5 per cent to Rs 5,125 crore during the quarter under review as against Rs 5,257 crore a year ago.

"Overall, the segment had a USG of (-) 2 per cent with flat volumes," said HUL.

The hair care segment delivered volume-driven high-single digit growth led by outperformance in Dove and Tresemme.

Skin care and colour cosmetics grew in low-single digit.

"Premium skin care continued its strong double-digit growth trajectory led by innovations in new demand spaces and formats.

"Skin cleansing declined due to impact of price cuts coupled with drop in volumes in the mass and popular segments while bodywash continued to do well," it said.

Its foods & refreshment reported a 3 per cent growth in revenue to Rs 3,910 crore in the quarter under review.

The segment has 4 per cent flat volume growth.

"Functional nutritional drinks (Horlicks & Boost) delivered high single-digit growth, driven by Plus range.

"Tea continued to strengthen value and volume market leadership," it said.

However, in tea business, HUL witnessed consumers downgrading to loose tea. Coffee delivered double-digit growth driven by pricing.

"Foods grew in mid-single digit led by strong performance in soups and food solutions.

"Mayonnaise and peanut butter continue to gain consumer traction.

"Ice cream grew in double digit led by volumes," it said.

Revenue from other segments, which includes exports, consignment, etc was also down 11.6 per cent to Rs 466 crore.

It was at Rs 527 crore in the March quarter last fiscal.

The company reported a consolidated net profit of Rs 10,282 crore for the entire FY24, as against Rs 10,143 crore in 2022-23.

Its total income rose to 2.64 per cent to Rs 62,707 crore in FY24 as against Rs 61,092 crore in FY23.

Meanwhile, the board of HUL in a meeting held on Wednesday proposed a final dividend of Rs 24 per share, on equity shares of Re 1 each, subject to approval of shareholders at the AGM.

"Together with interim dividend of Rs 18 per share, the total dividend for the year amounts to Rs 42 per share, an increase of 8 per cent vs FY23," it said.

HUL CEO and managing director Rohit Jawa the company has delivered a "resilient performance" in FY24.

"We remain focused on driving operational excellence and have continued to build back our gross margins while stepping up investment in brands and long-term capabilities.

"Looking forward, I am optimistic of consumer demand gradually improving due to a normal monsoon and better macro-economic indicators," he said.

During the earnings call, HUL CFO Ritesh Tiwari told reporters that the company had "price decrease in the home care and personal care products".

"This is because the commodities overall have softened and there is a deflationary scenario... which is why we have taken price cuts," he said, adding that the process of correcting prices and passing on the benefit of commodity deflation has been completed across the board of HUL.

Shares of the company ended 0.16 per cent down at Rs 2,259.15 apiece on the BSE.