Mumbai: FMCG Bellwether Hindustan Unilever (Hun) posted a 9% growth in the Mandiri Net Profit Rs 2,187 Crore in the second quarter which ended September 30 compared to RS 2,009 Crore in the previous fiscal equation period, while sales grew by 11%.
Rs 12,516 Crore (RS 11,276 Crore last year).
The total cost rose by almost 12% at RS 9,883 Crore during the quarter marked by inflation that had never happened before, which was described by CMD Sanjiv Mehta as something “not seen for years”.
A high inflation environment has brought margins under pressure.
While the EBITDA margin at 25% was increased in sequence compared to the June quarter of this year, Margin Yoy fell with 40 basis points (100bps = 1 percentage point) compared to the quarter in accordance last year.
Hul said growth in the bottom line was assisted by clean income management and savings that allowed the company to manage inflationary pressure with the aim of maintaining consumers in its wares.
Nearly 70% of Hul’s growth comes from the volume, while the balance of pricing measures taken by FMCG Major.
In sequence, Hul has raised a price of 2% even when the company remains optimistic about demand recovery.
Hul said the performance was broad-based with the three divisions that grew competitively – more than 75% of businesses gained market share and penetration.
Increased price calibrated taken cross portfolio washing cloth and household care to partly offset high inflation in input costs.
The same approach to price increases has helped protect the beauty and personal care business model because vegetable oil prices remain at increased levels.
“The September Quarter witnessed a sequential increase in trading conditions, although it remained challenging with the inflation rate of unprecedented input costs and consumer sentiments subjected.
In this background, we have provided a strong performance of planting upper lines in two digits and increasing profitability sequential, “said Mehta.
He added, “The increase in prices of calibrated and laser sharp focus on savings has helped us protect our business model while ensuring the equations of our values ​​for our customers.” Hul CFO Ritesh Tiwari said the industry continued to witness an unprecedented inflation rate in some of our main input materials, palm oil, crude oil, packaging material, and shipping rates.
Hul, said Tiwari, will continue to manage all of its P & L lines, utilizing a strong savings program, and using the principles of clean income management to take a calibrated and wise price determination.
Volume growth rose 4% on the basis of the year-to-year.
However, if seen in sequence, lower than the 9% volume growth in the June quarter due to the basic effects of 2020 “unusual.” Laggard Utama in volume growth in our view is a hygiene, sanitis, food products, and tea (both due to high or sharp price increases), “said Abneesh Roy from Edelweiss Securities.
Nielsen’s figures revealed that the growth of the rural market for the FMCG industry has been moderated , Although from a higher base.
Urban growth on the other hand has edged up with increased mobility after the second Covid wave (Google Mobility Index is at 87% in September 2021, compared to 37% in May 2021).
However, overall consumer sentiment remains Calm down.
The Hul Council has declared an interim dividend of Rs 15 per share for the current fiscal year.
Following the announcement of the results, Hul’s stock fell by around 4% to close at Rs 2,546 in BSE on Tuesday.