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HUL springs a surprise

Mumbai, April 28: Hindustan Unilever Ltd (HUL) today beat Street estimates to report an 11 per cent growth in net profit for the fourth quarter ended March 31, 2014, at Rs 872.13 crore against Rs 787.20 crore in the year-ago period.

Analysts had forecast the FMCG giant to register net profits of Rs 850 crore during the quarter.

The better-than-expected performance comes at a time slowdown in the domestic economy impacted demand for FMCG goods. While both urban and rural markets saw tepid demand, the impact was felt more on discretionary spending.

“Against the backdrop of a challenging environment, we have delivered another year of competitive and profitable growth. We stepped up investment behind our brands and innovations, while driving cost savings and operational efficiencies with even greater rigor. Looking ahead, we are confident that our strategy is on track to deliver sustainable long-term growth and margin improvement,” Harish Manwani, chairman of HUL, said.

During the quarter, the domestic consumer business grew ahead of the overall market at 9 per cent, even as volumes grew 3 per cent. The volume growth was in line with analysts’ estimates of 3-5 per cent.

“The operating context during the quarter remained challenging with slowing market growth and high competitive intensity. Firm input costs were managed through a mix of judicious pricing and cost savings. Brand investments were sustained at competitive levels with higher advertising spend being offset by lower promotional activities,” HUL said.

Net sales during the quarter rose 8.9 per cent to Rs 6,935.82 crore from Rs 6,367.14 crore in the corresponding quarter of the preceding year.

The contribution of home and personal care was at Rs 5,407.16 crore (Rs 4,960.46 crore), while Rs 1,275.07 crore came from the food segment.

For the full fiscal 2013-14, HUL’s net profit rose to Rs 3,955 crore from Rs 3,839 crore.

 
 
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