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:

INTERNAL SECURITY

REUTERS SHOWCASE

Setback For Sahara

Setback For Sahara

Supreme Court defers verdict on Sahara plea to raise more debt on hotels  Full Article 

SpiceJet Crisis

SpiceJet Crisis

SpiceJet says fleet grounded on lack of fuel  Full Article 

Drug Patents

Drug Patents

Novartis sues Cipla over respiratory drug Onbrez   Full Article 

Boost for Tata Steel

Boost for Tata Steel

Tata Steel restarts key iron mines amid shortage  Full Article 

Reuters Poll

Reuters Poll

BSE Sensex to hit 32,980 by December 2015  Full Article 

India Outlook

India Outlook

ADB trims growth forecasts for developing Asia, says India to grow 5.5 pct in 2014  Full Article 

Real Estate

Real Estate

HDFC to raise $500 mln real estate private equity fund - sources  Full Article 

Banking Sector

Banking Sector

Japan banks to bulk up India presence on improving ties   Full Article 

U.S. Spending Bill

U.S. Spending Bill

Obama signs bill $1.1 trillion government spending bill  Full Article 

Reuters India Mobile

Reuters India Mobile

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