Hindustan Unilever Ltd.’s first-quarter profit missed estimates and its margin contracted on higher raw material costs.
Net profit of India’s largest consumer goods maker fell 3.7% sequentially to Rs 2,070 crore in the quarter ended June, according to its exchange filing. That compares with the Rs 2,211.3-crore consensus forecast of analysts tracked by Bloomberg.
The company’s volume rose 9% over a year earlier in the first quarter, a period of local lockdowns to contain the second wave of the pandemic. It compares with a contraction of 8% a year earlier when the nation was under a complete lockdown. Volume growth, however, slowed sequentially. Domestic sales grew 12% over a year earlier.
Although renewed restrictions in India impacted the market in the second quarter (April-June), they were less severe than in the same period last year, parent Unilever Plc. said in its half yearly commentary. Tea grew at high single digits, led by price increase in India as a result of raw material inflation.
HUL Q1 Highlights (QoQ)
Revenue from operations fell 1.8% to Rs 11,915 crore against an estimated Rs 12,168.4 crore.
Operating profit fell 3.86% to Rs 2,847 crore.
Margin contracted sequentially to 23.9% from 24.4%.
“In a challenging environment, we have delivered a strong performance across top line and bottom line,” Sanjiv Mehta, chairman and managing director at HUL, said. “Our performance in the quarter has been resilient and is reflective of our capabilities, the agility in our operations and the intrinsic strength of our portfolio.”