HUL Q4 Results: Profit Down 6% At Rs 2,406 Crore, Higher Costs Hurt Margin
The consolidated net profit of India's largest consumer goods maker fell 1.53% at Rs 2,561 crore in the quarter ended March.
Hindustan Unilever Ltd.'s fourth-quarter profit missed estimates amid sustained demand woes and increasing competition from local peers.
The standalone net profit of India's largest consumer goods maker declined 5.7% to Rs 2,406 crore in the January-March quarter, according to an exchange filing. That compares with the Rs 2,479-crore consensus estimate of analysts tracked by Bloomberg.
HUL Q4 FY24 (Standalone, YoY)
Revenue was down 0.2% at Rs 14,857 crore, missing estimates.
Ebitda down 1.03% at Rs 3,435 crore.
Margin at 23.1% vs 23.3%
Advertising and promotion, accounting for 10.8% of total sales, rose 23% to Rs 1,586 crore. The increase was driven by digital spends.
Volume grew 2% over a year ago in Q4, similar to the growth rate seen in the preceding three months, according to the company.
“I am optimistic of consumer demand gradually improving due to a normal monsoon and better macro-economic indicators,” Chief Executive Officer Rohit Jawa said. The company is also “re-shaping” its portfolio to focus on “high growth spaces” such as premium beauty and international cuisine which currently contributes to 25% of total business, according to him.
HUL has lost market share in mass detergent bar and mass skin cleansing.
Jawa expressed dissatisfaction with the performance of the skin cleansing portfolio, comprising soap and body wash. HUL is taking price cuts and intensifying innovations to lure affluent customers to enhance sales.
Beauty and personal care — a segment where HUL is seeing the maximum competition from new-age brands — saw its revenue fall 2.7% to Rs 5,050 crore. Food and refreshments rose 3% to Rs 3,911 crore. Its largest segment, home care, witnessed 1.4% increase in revenue to Rs 5,715 crore.
During the fiscal, HUL's Clinic Plus brand crossed the Rs 2,000 crore turnover mark. Three more brands — Boost, Vaseline and Sunsilk — are set to enter the Rs 1,000 crore club, its investor presentation showed.
HUL's operational performance was hurt owing to higher ad spends, an impact of 120-basis points due to royalty payout to its European parent and another 60-basis points headwind because of the GSK deal expiration.
Sharing its outlook, the company said it is hopeful that a good monsoon this year will boost rural incomes, thereby improving consumption. It has ruled out price hikes at least till September to remain competitive. It, however, would start taking marginal price hikes in second half of FY25.
HUL anticipates a gradual recovery in volume. Premiumization in various categories is expected to cushion growth until consumption picks up.
Over the past year, the company has been introducing several new premium products under Lakme cosmetics, Ponds skincare.
HUL is currently exploring various options for its ice cream business, including the potential of creating a standalone unit, mirroring the structure of its parent. It will have to decide prior to the separation of global business, which is scheduled in the second half of 2025.
The Mumbai-based company has announced a dividend of Rs 24 per share.
Shares of HUL closed 0.16% lower, ahead of the announcement as compared with 0.16% advance in the benchmark S&P BSE Sensex.