FMCG major Hindustan Unilever ’s second quarter net profit surged better-than-expected 22% year-on-year to Rs 688.92 crore, as strong sales growth and price hikes offset a rise in raw material costs.
HUL’s net sales in July-September rose 18% from a year ago to Rs 5,522.16 crore.
Analysts on average had expected HUL to report a profit of Rs 590 crore on revenue of Rs 5,340 crore, according to a CNBC-TV18 poll.
HUL shares jumped to their life high of Rs 378.15 on NSE as investors cheered the robust earnings growth from the largest FMCG company in India.
HUL’s raw material costs during the second quarter rose 27% from a year ago to Rs 2,290.54 crore.
"Inflation and commodity costs continued to be high…Cost of goods sold is up by 340 bps due to high input costs, especially in soaps and detergents…Cost pressures were managed through aggressive savings programmes coupled with judicious pricing," HUL said on Monday.
The price hikes taken across several products in the second quarter, coupled with strong growth across personal products, soaps and detergents and foods segments boosted earnings.
While HUL’s soaps and detergents revenue rose 22% to Rs 2,592.55 crore, personal products grew 18% to Rs 1,612.63 crore. Package foods sales rose 21% from a year ago to Rs 331.84 crore and beverages were up 15% to Rs 653.26 crore.
However, the company’s revenue from other businesses, which includes chemicals and water purifier business, fell 24% year-on-year to Rs 116.07 crore over the three-month period.
In the second quarter, HUL had exceptional gains of Rs 44.42 crore, which included profit from sale of properties. In the year-ago quarter, HUL had exceptional gains of Rs 40.44 crore, which also included profit from sale of properties and sale of long term trade investments.
At 15:15 hrs, HUL shares were trading up 7% at Rs 375.15 on NSE.
Source: www.moneycontrol.com
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DENIP Consultants Pvt Ltd
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