By Hindustan Unilever (HUL), a leading consumer goods company, reported a flat growth in net profit for the December quarter, with a marginal increase of 0.5% to ₹2,519 crore compared to ₹2,505 crore in the same period last year.
Sales and Volume Growth
Despite a 2% year-on-year growth in volumes during the quarter ending December, HUL experienced stagnant sales growth, with a slight decline of 0.3% to ₹14,928 crore. The decline in sales was attributed to price cuts implemented by the company across various product categories.
Market Outlook and Expectations
Rohit Jawa, CEO and MD of HUL, expressed optimism regarding a gradual recovery in market demand, citing factors such as increased government spending, recovery in winter crop sowing, and improved crop realization. He emphasized that rural income growth and winter crop yields would play pivotal roles in determining the pace of recovery.
Competitive Landscape and Commodity Prices
Jawa also highlighted the expectation of sustained competitive intensity in the market due to favorable commodity prices. Looking ahead, the company anticipates marginal negative price growth if commodity prices remain stable. Despite short-term challenges, HUL remains confident in its ability to capitalize on emerging opportunities.
Segment Performance
HUL derives a significant portion of its revenue from home care and beauty and personal care (BPC) segments. While both segments experienced mid-single digit volume growth, home care revenues declined by 1% primarily due to pricing actions. The BPC segment, however, reported no change in revenues.
Impact on Food and Refreshment Business
The food and refreshment business witnessed a slight decline in volumes, coupled with a 1% increase in revenues. Despite challenges, HUL highlighted the strong performance of its tea segment, particularly in green tea and flavored tea variants. Additionally, coffee sales grew significantly, driven by pricing strategies.
Product Innovations and Initiatives
During the quarter, HUL introduced new products such as Knorr Korean K-Pot noodles and Bru Gold in Vanilla, Caramel, and Hazelnut flavors, aiming to cater to evolving consumer preferences and expand its product portfolio.
