Hindustan Unilever Ltd (HUL), India’s leading FMCG company, Thursday posted an 11.68 per cent increase in net profit to Rs 2,505 crore for the quarter ended December 2022 (Q3) as against a profit of Rs 2,243 crore in the year-ago period. The HUL board also approved a hike in royalty and service fees to its parent Unilever group.
HUL’s total income for the period was Rs 15,456 crore, up 17.24 per cent against Rs 13,183 crore logged in the corresponding quarter of the previous fiscal.
In the new agreement, royalty and central services fees will increase from 2.65 per cent (FY22) to 3.45 per cent of turnover. This increase will be effected in a staggered manner over three years. The current technology, trademark license and central services agreement with Unilever group was entered into in January 2013 for 10 years.
“During the quarter we saw inflation moderating, albeit remaining high YoY. EBITDA margin at 23.6 per cent improved 30 bps versus second quarter of 2022 and declined 180 bps year-on-year. We continue to manage our business dynamically by driving savings harder across all lines of P&L, ensuring the right price-value equation and investing competitively behind our brands,” the company said.
HUL shares declined 1.36 per cent to finish at Rs 2,650.25 on the Sensex on Thursday.
Sanjiv Mehta, CEO and MD, said: “Sustaining our strong momentum, we had yet another quarter of solid all-round performance delivering double-digit revenue and earnings growth. Our consistent performance is reflective of our strategic clarity, strength of our brands, excellence in execution, and dynamic financial management.”
“Looking forward, we are cautiously optimistic in the near term and believe that the worst of inflation is behind us. This should aid in a gradual recovery of consumer demand. We remain focused on managing our business with agility, continue growing our consumer franchise whilst maintaining margins in a healthy range,” Mehta said.
Home care delivered another solid performance with 32 per cent revenue growth and double-digit volume growth, it said. Both fabric wash and household care grew in high double-digits with all parts of the portfolio performing very well. Liquids portfolio continued to deliver strong results driven by effective market development actions. Calibrated price increases were taken in fabric wash and household care portfolios to partly offset the input cost inflation, HUL said.