Hindustan Unilever clocks 4% sales growth

Firm hit by weak consumer sentiment

Hindustan Unilever Ltd. (HUL) reported a 4% growth in sales during the December quarter, one of the slowest rates of growth since demonetisation.

HUL attributed the subdued growth to weaker consumer sentiment, weather disruptions— a delayed winter that impacted its skin care sales — and overall challenging market environment.

The firm believes the demand outlook is challenging as market growth continues to be sluggish.

“If you ask me, has the tide turned? In December quarter, there was no evidence of that and the market growth was lower than in the September quarter,” said Sanjiv Mehta, CMD, HUL.

“Is the government cognisant of the challenges. Absolutely yes. And the challenge is absolutely real... But we are still growing and not in the negative territory,” he added. Domestic sales rose to ₹9,696 crore in the December quarter compared with the ₹9,357 crore in the corresponding quarter of the previous fiscal. Net profit was pegged at ₹1,616 crore, higher than the corresponding year-earlier quarter’s ₹1,444 crore.

The underlying volume — number of products sold — growth was pegged at 5% even as its beauty and personal care vertical saw a fall in sales, primarily due to delayed winter affecting the sale of skin care products.

However, the the home care and foods and refreshments verticals expanded in the December quarter.

Interestingly, the company said that it would increase the prices of soap by 5-6% in the March quarter due to rising commodity prices. “As a country, we should not beat down consumer confidence. It is not a doomsday scenario. The government is conscious and I hope they will take steps to put more money in the hands of consumers Even if in the short term, they have to loosen the fiscal deficit to do it,” added Mr. Mehta.