HUL Q3 results: Net profit soars 12% to ₹2,505 cr

India's biggest fast moving consumer goods firm, Hindustan Unilever Ltd on Thursday reported a net profit of ₹2,505 crore for the third quarter, up 12% year-on-year from ₹2,243 crore in the year-ago period.

Revenue of the FMCG giant grew 16% to ₹14,986 crore during the quarter ended December 31, 2022. The double-digit revenue growth was aided by the home care segment, which witnessed 32% growth.

Growth was ahead of the market with more than 75% of the business winning market shares, the Indian arm of Unilever Plc says in a stock exchange filing.

Earnings before interest, tax, depreciation and amortisation (EBITDA) for the quarter stood at ₹3,537 crores, up 8% year-over-year. EBITDA margin declined 180 basis points to 23.6%.

"Sustaining our strong momentum, we had yet another quarter of solid all-round performance delivering double-digit revenue and earnings growth. Our consistent performance is reflective of our strategic clarity, strength of our brands, excellence in execution, and dynamic financial management," says Sanjiv Mehta, CEO and managing director, HUL.

"Looking forward, we are cautiously optimistic in the near term and believe that the worst of inflation is behind us. This should aid in a gradual recovery of consumer demand. We remain focused on managing our business with agility, continue growing our consumer franchise whilst maintaining margins in a healthy range," Mehta says.

HUL's foods & refreshment business delivered 7% growth led by robust performance in foods, coffee and ice-cream.

The company's beauty & personal care segment grew 10%. "Skin Cleansing delivered strong double-digit growth with volumes growing in mid-single digit. With softening in Palm Oil, price reductions were taken in soaps portfolio," says HUL.

Delayed winter impacted growth in the skin care business, however, the non-winter portfolio delivered double-digit growth, it says.

The HUL board also approved the proposal to enter a new arrangement with Unilever group entities for the provision of technology, trademark licences and services to HUL.

"In the new agreement, the royalty and central services fees will increase from c.2.65% (FY22) to c.3.45% of turnover. This increase will be effected in a staggered manner over a period of 3 years. This arrangement is subject to appropriate regulatory approvals," the company says, adding the new arrangement will ensure that HUL continues to receive the technology, services and IP support from Unilever.