HUL profit rises 16 percent, shares fall on royalties

MUMBAI Tue Jan 22, 2013 10:35pm IST

The owner of a ''Kirana'' or mom-and-pop grocery store accepts money from a customer in his shop in Mumbai December 7, 2012. REUTERS/Vivek Prakash/Files

The owner of a ''Kirana'' or mom-and-pop grocery store accepts money from a customer in his shop in Mumbai December 7, 2012.

Credit: Reuters/Vivek Prakash/Files

Related Topics

Stocks

   

MUMBAI (Reuters) - Hindustan Unilever Ltd (HUL)(HLL.NS), India's largest consumer goods maker, reported a 16 percent jump in third-quarter net profit, but low volume growth and a rise in royalty payments knocked its shares down as much as 5 percent.

Less discretionary spending among consumers cut sales of products such as packaged foods and personal care items, but higher prices and lower raw material costs aided margins.

The Indian unit of Anglo-Dutch conglomerate Unilever Plc said its net profit rose to 8.7 billion rupees for the fiscal third quarter ending December 31, from 7.5 billion rupees a year earlier.

HUL's shares have fallen over 10 percent in the December quarter partially on concerns it may have to pay more in royalties, in line with Unilever in Indonesia, a move the company confirmed on Tuesday.

The royalty HUL pays to its parent company for use of its trademarks will gradually increase by March 2018 to around 3.15 percent of turnover, from the current 1.4 percent, it said in a statement.

The Indian company, valued at $19.5 billion, makes popular brands including skin creams Fair and Lovely, Sunsilk shampoo, Lux soap and Kissan ketchup.

Analysts had estimated a profit of 8.8 billion rupees on sales of 65.7 billion, Thomson Reuters Starmine Estimates showed.

HUL stock trades at 28.5 times its 12-month forward earnings, compared with peers ITC's (ITC.NS) 25.5 times, and Godrej Consumer's (GOCP.NS) 26.5 times, according to Thomson Reuters Starmine Smart Estimate.

(Reporting by Nandita Bose; Editing by Daniel Magnowski)

FILED UNDER:

Reuters Showcase

GDP Growth

GDP Growth

India revises up 2013/14 GDP growth to 6.9 percent.  Full Article 

Pharma Deal

Pharma Deal

Sun Pharmaceutical wins U.S. approval to buy Ranbaxy  Full Article 

Adani Restructuring

Adani Restructuring

Adani hives off power, ports businesses to boost growth.  Full Article 

Bank of Baroda

Bank of Baroda

Q3 net profit down 69 pct on higher provisions  Full Article 

Trading Fees

Trading Fees

BSE slashes fees in FX derivatives battle with NSE  Full Article 

SpiceJet Turnaround

SpiceJet Turnaround

SpiceJet board approves up to $243 mln share sale plan  Full Article 

Currency Market

Currency Market

RBI urges companies to hedge FX exposure  Full Article 

Banking Sector

Banking Sector

Banks say no room to cut lending rates, thwarting RBI easing  Full Article 

Reuters Poll

Reuters Poll

RBI seen holding rates steady on Tuesday, minority of analysts expect cut  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage