Mumbai, November 01: Hindustan Unilever Ltd (HINDUNILVR.NS : 97.8 -1.15) (HUL) on Saturday reported a 21.6 % decline in its net profit at Rs 428.53 crore in the second quarter ended September 30, 2009, compared to Rs 546.6 crore in the corresponding quarter last year.
The country s largest FMCG company attributed the decline to a settlement signed with the workers. Our net profit declined 21.6% due to exceptional gains from property disposal in the prior year and exceptional charge largely due to a provision related to the settlement signed with erstwhile workers of a closed unit in the current period, said chief financial officer R Sridhar while announcing the results.
The company s sales increased 5% to Rs 4,228.11 crore during the period as compared with the corresponding period last year. Our domestic consumer business has registered an 8% growth and operating profit has grown by 16% and PBIT margins improved by 140 bps, said Sridhar. However, analysts are not impressed with the figures. According to Nikhil Vora, IDFC SSKI Securities Ltd managing director, The company has posted average results this quarter.
In fact, HUL is under growing in the FMCG sector. The company has posted 1% volume growth, which indicates that it is losing market share to other players in key categories. The observation is significant given the healthy Q2 figures posted by other FMCG majors like Godrej (GODREJCP.NS : 270.85 -2.4) Consumer Goods, Marico (MARICO.NS : 0 0) and Dabur (DABUR.NS : 152.1 -1.9) on the back of strong performance across categories.
HUL s top line growth is disappointing and below expectation. The company s soaps and detergents have dragged its volume growth, explained Anand Shah, an analyst with Angel Broking. HUL chairman Harish Manwani, however, is upbeat about the performance. We sustained good growth momentum in the domestic consumer business.
Personal products and foods businesses continue to deliver strong growth across all our key brands. In soaps and detergents, we are actively strengthening our full portfolio and improving our competitiveness in the mass segment. We remain determined to profitably grow volumes and further strengthen our market leadership across categories, he said.
-Agencies