UPDATE 1-Hindustan Unilever Q3 rises, shares fall on higher royalties
MUMBAI Jan 22 (Reuters) - Hindustan Unilever Ltd (HUL) , 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 ($161.7 million) for the fiscal third quarter ending Dec. 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 25.5 times, and Godrej Consumer's 26.5 times, according to Thomson Reuters Starmine Smart Estimate.
- Tweet this
- Share this
- Digg this
Trending On Reuters
South Asian leaders will pile pressure on Pakistan on Thursday to salvage a summit in Nepal by agreeing to electricity sharing and the free movement of vehicles across borders, measures aimed at boosting trade among nearly a quarter of the world's people. Full Article
Disputes over land for industry on the rise in India, angering locals - charities Full Article