The Hindu Business Line : Hind Lever net leaps 60 pc to Rs 520 cr in Q3

Segment-wise growth
Home & personal care products up by 15 pc
Tea & coffee up 6 pc
Processed foods 18 pc
Ice-cream 18 pc
Laundry segment performs better
Revenue from rural market growing

Mumbai , Oct. 31

Hindustan Lever Ltd (HLL) reported a 60 per cent increase in net profit at Rs 520.74 crore for the third quarter ended September 30, against Rs 325.96 crore in the year-ago period. The profit is inclusive of an exceptional income of Rs 137.74 crore. Excluding this, the after-tax profit rose by 17.7 per cent to Rs 383 crore from Rs 325.35 crore.

The leading FMCG company registered a 12.2 per cent increase in sales to Rs 3,066.01 crore from Rs 2,731.54 crore.

The exceptional items include profit from sale of investment in Tata Chemicals shares (Rs 120.8 crore) and reversal of provision for employee-related costs at HLL's Sewri factory in Mumbai (Rs 66.8 crore).

Mr D. Sundaram, Director Finance, said cost-saving measures coupled with selective price increase and introduction of a `better product mix' helped the company to improve its gross margins. But cost pressures are still there, he said. "But if the decline in oil prices continues, we believe input cost-escalation may ease."

Profit before interest and taxation for the quarter amounted to Rs 412 crore (Rs 345.74 crore), registering an increase of 19.8 per cent.

Profit for the nine-month period increased 19.4 per cent to Rs 1,056.24 crore from Rs 884.53 crore.

Overall, the FMCG business grew by 14.2 per cent in the quarter — 11 cent by volume and 3 per cent by increase in product prices. The company had raised prices of soaps and detergents by up to 7 per cent in the quarter.

Sales of home and personal care products, which accounts for 70 per cent of the company's business, grew by 15 per cent. The highly completive laundry segment performed better due to introduction of premium products.

The foods business, which accounts for 20 per cent of sales, grew 10.7 per cent. In the beverage segment, tea and coffee grew by 6 per cent, processed foods 18 per cent and ice-cream 18 per cent, said Mr Sundaram.

He said revenue from rural market is growing, though he could not quantity the figures on a quarterly basis.

Going ahead, he added that the key for growth would be cost-management and investment in brands.

The company's spend on advertisement and promotion went up from 10 per cent to 13 per cent in the quarter.

Mr Harish Manwani, Chairman of the company said in a statement: "FMCG markets continue to grow well, and we have registered robust growth across categories. With input inflation as an ongoing challenge, the business remains focussed on driving cost saving initiatives and effecting selective price increase."

Shares of HLL ended at Rs 233.60 up by 2.12 per cent from Monday's close.