HUL’s earnings drops for the first time since the March 2022 QTR Covid-hit

MUMBAI: On a standalone basis, HUL, the biggest FMCG firm in India, reported a roughly 6% year-over-year fall in net profit for the March quarter, coming in at Rs 2,406 crore. According to statistics obtained from Refinitiv, this was the worst YoY decline in net profit for the firm since the December 2015 quarter and the first since the Covid-impacted March 2020 quarter.

“It is evident from HUL’s segmental statistics that price growth has been negatively affected for their two largest categories, home care and BPC (beauty & personal care). Only in terms of food and drinks is it advantageous. Therefore, price reductions have affected them,” an expert said.

The total sales for the quarter rose slightly to Rs 14,693 crore in Q4 FY24 from Rs 14,638 crore in the same period last year, indicating the industry’s ongoing struggle with muted rural demand. During a meeting at the company’s headquarters, the senior management said that although rural areas are “catching up” and exhibiting some signs of recovery, metropolitan markets are still driving the industry’s total development. The company is relying on forecasts of a typical monsoon to increase demand in rural areas.

“I think that as a result of improved macro indicators and a regular monsoon, consumer demand would progressively improve. Urban regions have shown more robust, but the magnitude of development will be larger when the macroeconomic are somewhat better for rural areas “HUL CEO and MD Rohit Jawa said. HUL produced 1% underlying revenue growth and 2% underlying volume increase during the course of the quarter.
HUL’s sales in the important beauty and personal care sector fell 2.7% to Rs 5,050 crore in Q4 from Rs 5,188 crore in the same time last year.
“Skin cleansing declined due to impact of price cuts coupled with drop in volumes in the mass and popular segments,” the business said. The company will pursue competitive volume growth as its strategy. Additionally, it will keep making investments in high-growth driving areas.