Mumbai, Oct. 31: Hindustan Lever Ltd (HLL) has recorded a 14 per cent growth in sales in the three-month period ended September 30, bettering the 10.3 per cent rise in the June quarter.

Profit after tax, before exceptional items, increased 15.2 per cent due to lower interest costs after redemption of bonus debentures and a decline in tax payments. Net profit was flat as the second quarter included income from sale of property .

The fast moving consumer goods firm also gained by relocating its plants to Himachal Pradesh and Uttaranchal, states which offer tax sops.

After many years of restructuring that saw the consumer goods company put much of its money in ‘power brands’, HLL has reported two successive quarters of double-digit sales growth, indicating a resurgence in many segments.

The markets applauded the turnaround with the Hind Lever stock gaining Rs 4 at Rs 161.40.

“We continue to strengthen the competitiveness of our business. A strong growth momentum delivered a double-digit growth in the September quarter,” chairman Harish Manwani said. “A combination of high-impact innovations, market activation, renewed distribution initiatives and significant brand investments have enabled us to win,” he added.

HLL could have performed better if there had not been a steep hike in raw material costs. Soda Ash, a key ingredient, packaging and freight costs have also squeezed profits.

“Cost pressures continue to be a cause of concern, even though they were partly neutralised by cost-control programmes and selective price increases,” Manwani said.

HLL, which earns almost 50 per cent of its revenue from villages, hopes rural markets will keep its cash registers ringing.

In the coming quarters, the maker of the popular Lifebuoy soap will also benefit from higher product prices and better sales as farmers to spend more on consumer goods.

In the quarter ended June 30, HLL announced spinning off its tea factories and gardens to focus on branded tea, a strategy pioneered by its rival Tata Tea. HLL is looking for partners to pick up stakes in the plantations as it focuses on brands like Lipton and Brooke Bond to boost profits.