HUL profit rises 16 percent, shares fall on royalties
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)
- Tweet this
- Share this
- Digg this
- Wall St Week Ahead - Fed change unlikely to blunt equities' appeal over bonds
- UPDATE 3-Heineken confirms, rebuffs SABMiller bid
- Islamic State executes eight Sunnis in northern Iraq
- NATO countries have begun arms deliveries to Ukraine - defence minister
- British queen urges Scots to 'think carefully' on independence vote
Xi's South Asia Visit
China will pledge to invest billions of dollars in India's rail network during a visit by President Xi Jinping this week, bringing more than diplomatic nicety to the neighbours' first summit since Narendra Modi became prime minister in May. Full Article | Video