Bengaluru: Hindustan Unilever reported a bigger-than-expected rise in quarterly profit on Friday, as price increases for products such as Dove soap and Surf Excel detergent powder cushioned the blow from higher costs of raw materials.
The company’s net income increased nearly 20% to 26.16 billion Indian rupees ($315.8 million) in the second quarter ended Sept. 30. Analysts on average had expected a profit of 24.03 billion rupees, according to IBES data from Refinitiv.
The Russia-Ukraine war, coupled with lingering supply issues from the COVID-19 pandemic, had led to a surge in costs of commodities, including palm oil, cocoa and crude, prompting corporations across the globe to jack up prices.
Analysts have estimated that over the past year, Unilever has raised prices by at least 10% across its portfolio, which has a number of household brands such Lifebuoy soap and Knorr soups.
Unilever’s sale of products increased around 16% to 145.14 billion rupees in the latest quarter.
Revenue from its home care division jumped 34%, while its beauty and personal care business revenue grew 11%.
Underlying volume growth, however, slowed to 4% in the second quarter, from a 6% increase in the first quarter.
“The demand environment remains challenging, with inflation impacting consumption,” Chief Executive Officer Sanjiv Mehta said in a statement.
Price hikes and the recent easing of commodity prices have led to consumer majors Nestle India and ITC reporting better-than-expected quarterly growth, even as analysts expect them to funnel savings towards product launches and advertising.
Unilever’s shares have risen 12% so far this year, more than Nestle’s 3% rise, but trailing ITC’s 58% jump. –Reuters
($1 = 82.8510 Indian rupees)
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