Hindustan Unilever Ltd Q3 net up 19.18% at Rs 2,989 crore; to acquire Minimalist for Rs 2,670 crore

FMCG major Hindustan Unilever Ltd on Wednesday reported a 19.18 per cent rise in consolidated net profit at Rs 2,989 crore in the December quarter, boosted by the sale of its 'Pureit' business.

The company, which posted a consolidated net profit of Rs 2,508 crore in the same quarter of the last fiscal year, said it will acquire 90.5 per cent shareholding of Uprising Science Pvt Ltd -- the firm behind the premium beauty brand Minimalist -- comprising secondary buyout for a cash consideration of Rs 2,670 crore at a pre-money enterprise valuation of Rs 2,955 crore.

HUL further said its board has approved the demerger of its ice cream business into Kwality Wall's (India) Ltd with one equity share of KWIL to be allotted for every one equity share held in Hindustan Unilever Ltd (HUL). Upon demerger and listing of KWIL, the entire shareholding of KWIL will be held directly by shareholders of HUL.

In the third quarter of the ongoing fiscal year, the growth in profit after tax was majorly on account of profit from the divestment of Pureit business, HUL said in a regulatory filing.

Consolidated total income in the third quarter was at Rs 16,050 crore as against Rs 15,781 crore in the year-ago period.

Total expenses during the quarter were higher at Rs 12,576 crore as compared to Rs 12,305 crore in the same period a year ago, it said.

The company had an exceptional item benefit of Rs 507 crore during the quarter.

HUL said it had an underlying sales growth of 2 per cent and a flat underlying volume growth (UVG) in the December quarter while absolute volume grew competitively, it was offset by a negative mix.

"FMCG demand trends remained subdued with continued moderation in urban growth while rural sustained its gradual recovery. In this operating context, we delivered competitive growth by driving unmissable brand superiority, investing behind brands and capabilities whilst maintaining healthy margins," HUL CEO and Managing Director Rohit Jawa said.

HUL said it has signed a definitive agreement to acquire the premium actives-led beauty brand 'Minimalist'. The company will acquire 90.5 per cent stake in the company through a combination of secondary buyouts and primary infusion with a path to acquire the balance stake in two years.

Jawa said the acquisition is in line with the company's strategic intent to transform its portfolio in fast-growing spaces.

"This acquisition is another key step to grow our beauty & wellbeing portfolio in the high growth masstige beauty segment. We continue to make progress on unlocking a billion aspirations by contemporising our core business, driving premiumisation through our future core business and ushering market-making in new demand spaces," Jawa said.

Minimalist founders Mohit Yadav and Rahul Yadav said, "Now, with HUL's robust offline distribution network, we look forward to making our products even more accessible across the country. This partnership also paves the way for our expansion into international markets helping us realise our dream of taking Minimalist to the world."

In the third quarter, HUL said its homecare segment had a strong volume-led performance, while in the 'beauty & wellbeing' category, hair care continued to share gain momentum but skin care was impacted by delayed winter.

Personal care revenue was impacted due to decline in hygiene segment of skin cleansing, the company said, adding in the foods category there was a sequential improvement in packaged foods and beverage.

On the outlook, Jawa said, “While we keep a close watch on the pace of recovery and the broader economic outlook in the short term, we remain confident of the medium to long term opportunity in the Indian FMCG sector and HUL's ability to grow competitively.”