Hindustan Unilever expects better volume growth in first quarter

MUMBAI (Reuters) - Hindustan Unilever Ltd (HUL), India's largest consumer goods firm, expects a sequential improvement in first-quarter volume growth, its chief financial officer said on Monday, after the firm's fourth-quarter results beat expectations.

Volumes in the January-March quarter rose 4 percent, less than the company estimated, but are expected to improve in the next quarter, CFO P.B. Balaji told reporters on a conference call on Monday.

The Indian unit of Anglo-Dutch consumer group Unilever reported a fourth-quarter profit above estimates, mainly helped by higher sales of its packaged food and hair and skin care products.

Net profit for the quarter stood at 10.90 billion rupees ($164.06 million), up from 10.18 billion rupees a year earlier. Analysts polled by Thomson Reuters estimated a profit of 10.78 billion rupees on average.

HUL's sales have been hurt in recent quarters due to weak demand in India's countryside, which accounts for about 35 percent of the company's revenue.

Drought in the last two years took a toll on consumer sentiment in Asia's third-largest economy. But the country's weather office has estimated a better monsoon for this year, leading analysts to expect demand will bounce back in fiscal 2017.

HUL's Balaji said demand so far remains subdued, especially in rural areas, and a good monsoon would be a "welcome tailwind."

The company, which sells everything from soaps and detergents to tea and coffee, has had to cut prices in the past year because of slack demand. But raw material prices are going up, and HUL is considering options including price increases, Balaji said.

($1 = 66.4400 Indian rupees)

(Reporting by Zeba Siddiqui in Mumbai; Editing by Sunil Nair)