Hindustan Unilever reports 2.33% drop in Q2 profit

Hindustan Unilever Ltd (HUL) announced a 2.33 per cent decline in consolidated net profit for the second quarter ending September 30, 2024, totalling Rs 2,595 crore, compared to Rs 2,657 crore during the same period last year. The decrease is attributed to moderating demand in urban markets, the company stated in a regulatory filing.

Despite the profit dip, HUL's revenue from product sales rose by 2.36 per cent to Rs 15,703 crore, up from Rs 15,340 crore a year earlier. CEO Rohit Jawa noted that while FMCG demand showed slower growth in urban areas, rural markets are gradually recovering. He emphasised that the company delivered a "competitive and profitable performance" in this challenging environment.

HUL reported an underlying sales growth of 2 per cent and an underlying volume growth of 3 per cent. Total expenses for the quarter reached Rs 12,581 crore, reflecting a 3.03 per cent year-on-year increase. The company’s total income, including other revenue, increased by 2.14 per cent to Rs 16,145 crore. The earnings statement highlighted that the previous year's results benefited from a one-off indirect tax credit in the Beauty and Wellbeing segment. Adjusting for this factor, underlying sales and volume growth remained at 3 per cent, with profit after tax showing a similar increase.

In terms of segment performance, HUL’s Home Care division saw an 8 per cent rise in revenue to Rs 5,731 crore, with strong growth in both Fabric Wash and Household Care. The Beauty & Wellbeing segment also grew by 2.51 per cent to Rs 3,421 crore, driven by mid-single-digit volume growth in Hair Care brands like Sunsilk, Dove, and Tresemme. Conversely, HUL's Personal Care business declined by 5 per cent to Rs 2,411 crore, affected by negative pricing and low-volume sales. The skin cleansing segment faced challenges, largely due to pricing actions.
 

The Foods & Refreshment category experienced a slight decline of 1.24 per cent to ₹3,803 crore, attributed to low-single-digit volume decreases. However, the tea segment continued to perform well, with coffee sales growing in double digits. HUL also reported stable volume in its ice cream business, including brands like Kwality Wall's and Magnum. However, revenue from the 'Other Segment', which includes exports and consignment sales, fell by 5.24 per cent to Rs 560 crore. Looking ahead, Jawa expressed cautious optimism regarding consumer demand recovery, emphasising HUL's commitment to strengthening its competitive advantage through brand investments and operational efficiency.

The company's board has approved an interim dividend of Rs 19 per share for the fiscal year ending March 31, 2025, along with a special dividend of Rs 10 per share, totaling a payout of Rs 6,814 crore.
HUL shares closed at Rs 2,658 on the BSE on Wednesday, down 0.90 per cent from the previous day.