Hindustan Unilever Q3 profit jumps nearly 19%, EBITDA margin widens

Fast-moving consumer goods major Hindustan Unilever Ltd (HUL) on Thursday reported an 18.7% growth in its consolidated net profit for the third quarter of 2021-22.

Consolidated net profit rose to Rs 2,300 crore for the quarter ended December 2021 from Rs 1,938 crore a year earlier, the company said.

Revenue from operations rose 10.25% to Rs 13,196 crore from Rs 11,969 crore in the corresponding period a year ago. Total expenses were at Rs 10,329 crore, up from Rs 10,129 crore a year earlier.

HUL said its third quarter EBITDA margin improved 100 basis points from the year-ago period to 25.4%. 

“In the context of unprecedented inflation, we continue to manage our business dynamically driving savings harder across all lines of profit and loss and taking calibrated pricing actions using the principles of net revenue management,” HUL said.

Other highlights

1) The company registered 11% domestic consumer growth.

2) Home care business recorded growth of 23%, led by strong performance in Fabric Wash and Household Care.

3) Beauty and personal care business grew 7% led by skin cleansing, skin care and colour cosmetics.

4) Foods and refreshment category grew 3% driven by tea and ice-creams

Management commentary

HUL managing director Sanjiv Mehta said that despite moderate market growth and significant levels of commodity price inflation, the company had delivered “a strong a resilient performance”.

“I am particularly pleased that the growth is extremely competitive with our market share gains being highest in more than a decade. Our performance is reflective of our strategic clarity, strength of our brands, operational excellence, and dynamic financial management of our business,” Mehta said.  

“In the near term, operating environment will continue to remain challenging. In this scenario, we will manage our business with agility, continue to grow our consumer franchise whilst maintaining our margins in a healthy range,” he added. 

The company said that the household care segment “sustained its robust performance and grew in high teens on a strong base, while the liquids and fabric sensations segment continued to “outperform”. 

“Calibrated price increases were taken across fabric wash and household care portfolios to partly offset the significant inflation in input costs,” the company said. 

“A calibrated approach towards price increase in Skin Cleansing and Hair Care has helped protect our business model even as vegetable oils continue to inflate at record levels. Together, skin care and colour cosmetics delivered double-digit growth and are above pre-COVID levels,” HUL said.