Bangalore: Hindustan Unilever on Friday posted a higher-than-expected quarterly profit as a rise in prices of products such as Dove Soap and Surf Excel detergent powder softened the blow from higher raw material costs.
The company’s net income rose nearly 20% to 26.16 billion Indian rupees ($315.8 million) for the second quarter ended September 30. Analysts had expected an average profit of Rs 24.03 billion, according to Refinitiv’s IBES data.
The Russo-Ukraine war, coupled with supply issues from the COVID-19 pandemic, increased the cost of commodities including palm oil, cocoa and crude, prompting corporations around the world to raise prices.
Analysts have estimated that over the past year, Unilever has increased prices by at least 10% in its portfolio, which has several homegrown brands such as Lifebuoy Soap and Knorr Soup.
Sales of Unilever’s products grew nearly 16% to Rs 145.14 billion in the latest quarter.
Revenue from its home care division grew 34%, while revenue from its beauty and personal care business grew 11%.
However, from 6% growth in the first quarter, underlying volume growth slowed to 4% in the second quarter.
“Demand environment remains challenging, with inflation impacting consumption,” Chief Executive Officer Sanjiv Mehta said in a statement.
Price hikes and recent easing in commodity prices have led consumer major Nestle India and ITC to report better-than-expected quarterly growth, even as analysts expect savings to be funneled for product launches and advertising .
Shares of Unilever are up 12% so far this year, more than Nestle’s 3% rise, but trailing ITC’s 58% jump. ,Reuters
($1 = 82.8510 Indian Rupee)
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