 "HUL net beats estimates but sales volume disappoints, stock down")
India’s largest FMCG major Hindustan Unilever today beat analyst expectation with a net profit of Rs 1019 crore but shares traded down 5 percent as the company’s sales volumes disappointed investors.
HUL’s first quarter sales grew to Rs 6687.5 crore from Rs 6250 crore in the year ago period but sales volumes only came in at4 percent in the first quarter against expectations of 5-6 percent.
During the quarter, the firm’s domestic consumer business grew at 7% .
[caption id=“attachment_988543” align=“alignleft” width=“380”] During the quarter, the firm’s domestic consumer business grewy at 7% .[/caption]
The company’s net profit at Rs 1019 crore beat analyst estimates who had expected the company to report profits of Rs 860 crore. However the results were 33 percent lower year-on-year due to a significant exceptional income generated in that quarter from the sale of properties.
Soaps and Detergent segment registered a sales growth of 8%.
Personal products grew by 2% year-on-year, which was disappointing.
Beverages registered a sales growth of 16% year-on-year.
Announcing the results, Harish Manwani, Chairman said: “In a difficult market environment, we have again delivered competitive growth and strong margin expansion through a sustained focus on innovation, in-market execution and robust cost management. While there are near term concerns particularly around slowing market growth, we are confident of the medium to long term growth prospects of the FMCG sector and our strategy of driving growth and profitability through innovation and operational excellence.”
ParentUnilever has become more cautious about prospects for emerging markets, a big growth driver for the consumer goods company, which reported underlying second-quarter sales growth shy of market expectations.
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