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HUL Q1 profit up 9% to Rs1,283 crore

LiveMint logoLiveMint 18-07-2017 Soumya Gupta

Mumbai: Hindustan Unilever Ltd (HUL), India’s largest packaged consumer goods firm, posted a 9.2% rise in net profits from a year ago even as underlying volume growth remained flat for the quarter ended June, primarily driven by de-stocking ahead of the roll out of goods and services tax (GST).

The seller of Surf detergent, Dove soap and Kissan ketchup said net profit grew to Rs1,283 crore from Rs1,174 crore a year ago. The earnings were better than analysts’ expectations. A Bloomberg poll of 10 analysts had estimated HUL’s revenue at Rs8,619 crore and net profit at Rs1,183.5 crore.

“During the quarter, trade sentiment remained cautious, particularly in the run-up to GST implementation. Despite high promotional intensity, stock pipelines remained low and varied across categories, channels and geographies,” the firm said in a statement to stock exchanges.

HUL’s gross revenues increased 4.7% to Rs9,335 crore. Its Ebitda (earnings before interest, tax, depreciation and amortization)—an indicator of operating profitability—grew 14% to Rs1,866 crore. Despite flat volumes, profits were boosted by a 75 basis points reduction in raw material costs and lower advertisement and promotional spend.

A basis point is one-hundredth a percentage point.

The flat growth in volumes comes after a sobering March quarter when volumes and sales had both grown by 4% each, beating market expectations of a slowdown due to lower consumer demand after demonetization. The company said its domestic consumer business grew 6%.

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