Hindustan Unilever Net Beats Estimates as Soap, Cream Sales Rise
Hindustan Unilever Ltd. (HUVR), the Indian unit of the world’s second-biggest consumer-goods company, reported second-quarter profit that beat analysts’ estimates as sales of its soaps and skin care creams climbed.
Net income rose 13 percent to 9.1 billion rupees ($148 million) in the three months ended September from 8.1 billion rupees a year earlier, the Mumbai-based company said in a statement today. Profit exceeded the 8.6 billion-rupee median of 34 analysts’ estimates compiled by Bloomberg.
Better-than-expected performance at the maker of Dove soap and Ponds anti-aging cream, could suggest that consumer sentiment across the country is picking up, Naveen Vyas, Kolkata-based analyst at Microsec Capital Ltd., said in an interview before the earnings. India’s exports have picked up and Reserve Bank of India Governor Raghuram Rajan said this month economic growth will accelerate from last quarter’s pace.
“There could be a mild thawing in consumer sentiment,” Vyas said. “Sales of some premium goods may have been better than expected.”
Hindustan Unilever (ULVR) fell 2.6 percent to 593.95 rupees in Mumbai trading yesterday. The stock has gained 13 percent this year, compared with a 16 percent climb in the 11-company S&P BSE FMCG Index of the nation’s biggest consumer goods companies.
Sales volume at the company grew five percent, compared with 7 percent in the same period last year. That metric reflects sales growth excluding price changes.
Parent Unilever this week reported the slowest quarterly sales growth in four years as demand for its soaps and spreads slowed in emerging markets and failed to pick up in North America and Europe amid higher levels of competiton.
The food price inflation in India and the decline in emerging market currencies affected Unilever and “we’re obviously working our way through that,” Chief Executive Officer Paul Polman said in a Oct. 24 conference call.
Sales at Hindustan Unilever, a unit of Unilever based in London and Rotterdam, climbed 9.6 percent to 67.5 billion rupees in the second quarter. That compared with the 67.3 billion-rupee median of analysts’ estimates.
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