MUMBAI: HUL reported a 1.4% year-on-year growth in revenue from operations to Rs 15,408 crore on a standalone basis in the Dec quarter. The marginal growth comes amid weak demand in urban regions where consumers have tightened household budgets on the back of high food inflation and shifted to smaller packs of soaps, edibles and shampoos.
Total sales in Q3 stood at Rs 15,195 crore compared to Rs 14,928 crore in the year ago quarter, translating into a growth of about 2%. Net profits jumped by 19% y-o-y to Rs 3,001 crore in Q3, helped by gains accrued on the sale of Pureit business. Net profit before exceptional items was flat. The slowdown in urban growth over the past few quarters has been sharper than expected, CEO & MD Rohit Jawa said in a post-earnings call, adding that the trend is not going to change anytime soon.
“And it is clearly driven by some degree of households titrating their budgets which is the reason why we see across categories (across the industry), people are titrating to smaller pack sizes. People are buying smaller packs in premium segment too. We expect this (trend) to be transitory,” Jawa said.
In rural, where consumers tend to have smaller budgets, small packs generally sell better and that is the trend now as well but in urban where companies usually push bigger packs to retail shelves, small packs are now growing ahead of large packs. High commodity inflation nudged FMCG players to take price hikes in Q3.
