HUL Q3 net up 18 pc; records strong volume growth

Hindustan Unilever Ltd (HUL) has recorded an 18 per cent growth in its Q3 FY12 net profit, which stood at Rs 754 crore. During the quarter, domestic consumer business grew at 16.5 per cent with strong underlying volume growth of 9.1 per cent. All segments delivered double digit growth.

Inflationary pressures during the quarter were primarily on account of currency depreciation. Cost pressures were managed through aggressive savings programmes, coupled with judicious pricing. Cost of goods sold was up by 140 bps. Brand investment continued to be competitive with A&P at 11.8 per cent of the turnover.

Soaps and detergents grew by 21 per cent, with growth ahead of the market. Rin Bar and Surf Excel Quickwash were re-launched during the quarter with an improved formulation. The business continued its focus on driving upgradation.

Skin cleansing delivered strong double digit growth across premium, popular and mass segments. Lux benefited from the re-launch in September quarter and Lifebuoy from its strong proposition of germ protection. Dove continues to drive category premiumisation.

Personal products delivered broad based volume led growth of 14 per cent with strong performance in skin and hair. In skin care, Fair and Lovely, Vaseline and Ponds grew in double digits. During the quarter, Dove Body lotion was launched and Lakme portfolio expanded with the introduction of Lakme Absolute - a high performance long wear makeup range.

Hair grew ahead of the market with double digit growth in Dove, Clinic Plus and Clear. Dove growth momentum accelerated and the business doubled during the quarter.

Oral care registered modest growth in a competitive environment. Pepsodent G was re-launched during the quarter in the fast growing advance care segment.

Beverages delivered competitive growth of 11 per cent with both tea and coffee growing in double digits. In tea, growth was led by the premium portfolio. Taj Mahal registered strong growth in modern trade and 3 Roses strengthened its proposition of health and taste. Coffee delivered strong growth nationally with innovations leading premiumisation of the category. Bru Gold was successfully launched during the quarter.

Packaged foods grew by 14 per cent and continued to lead market development. Kissan delivered strong growth benefiting from the relaunch in September quarter. However, the performance of Knorr soups was muted on account of slowdown in market.

Kwality Walls continued its strong growth momentum with innovations and increased coverage.

Commenting on the Q3 results, Harish Manwani, Chairman, Hindustan Unilever Ltd, said, “We have delivered another strong quarter of competitive growth with improvement in margins. The results, delivered against a backdrop of an uncertain economic environment, are reflective of the strength of our brands, consistency in our strategy and relentless focus on execution. We will continue to manage our business dynamically to deliver competitive, profitable and sustainable growth.”