HUL Q2 net up 22% at Rs 689 cr

Driven by strong volume growth across all segments, FMCG giant Hindustan Unilever (HUL) today reported net profit of Rs 688.92 crore in the second quarter ended September 30, 2011, up 21.69% from the same period last fiscal.

The company had posted net profit of Rs 566.12 crore in the second quarter last fiscal.

During the quarter, the company had a net sales of Rs 5,522.16 crore, an increase of 17.97% from Rs 4,680.87 crore in the corresponding period last fiscal.

The company's board of directors has also declared an interim dividend of Rs 3.50 per share for the accounting year ending March 31, 2012. Besides, it has announced entering into a tie up with Tata Teleservices for distribution of telecom products through HUL's distribution network in rural markets.

The company, which sells brands like 'Lux','Dove', Rin and 'Surf' among others, said it has seen a growth of 18.5% in revenue terms in its domestic consumer business with underlying volume growth of 9.8%.

"Growth has been broad based and ahead of market. All segments have delivered double digit growth for the third consecutive quarter," the company said.

During the quarter, the HUL's advertising and promotion spend stood at Rs 651.37 crore, a marginal increase from Rs 646.48 crore spent in the year-ago period.

"Inflation and commodity costs continued to be high. We have taken judicious price increases in the recent past but raw material prices will continue to a concern area going ahead," HUL Chief Financial Officer R Sridhar told reporters in a teleconference.

Soaps and detergents are the two categories which have been impacted the most because of the high raw material prices like palm oil. Besides inflation pressure, uncertain global economic scenario and the weakening of rupee is also a concern, he added.

During the quarter under review, sales revenue of soaps and detergents grew by 21.8% and personal products grew by 18.2% on the back of brands like Fair & Lovely, Vaseline and Ponds.

The firm's beverages segment grew by 14.6%, with all brands delivering double digits growth while its packaged foods, sold under Kissan range, grew 20.9%, HUL said.

"We will continue to leverage consumer insights to deliver winning innovations and maintain relentless focus on execution, cost management and building organizational capabilities for competitive advantage," HUL Chairman Harish Manwani said.

Scrips of HUL closed at Rs 375.25 on the BSE, up 7.38% from the previous close.