Hind Lever net up 77% to Rs 442 cr

Hindustan Lever Ltd (HLL), the country's largest fast-moving consumer goods company, today announced a 77 per cent rise in quarterly profit, boosted by a one-time gain.

HLL, which owns many popular FMCG brands, including Lux and Surf, posted a net profit of Rs 442.86 crore for the quarter ended March 2006, compared to Rs 250.25 crore in the corresponding period of the previous year. Profit after tax before exceptional items was up 13.62 per cent to Rs 293.98 crore.

The profits were helped by exceptional items comprising Rs 201.77 crore from the sale of coconut hair oil brand Nihar, residual costs of Rs 5.76 crore on disposal of plantation subsidiaries, provision of Rs 2.70 crore for diminution in value of investments in subsidiaries and provision of Rs 44.43 crore for retirement benefits and voluntary retirement.

Net sales for the quarter were up 11.63 per cent at Rs 2,798.05 crore. D Sundaram, finance director, HLL said growth this quarter had been broad-based across all categories as well as across the urban and rural markets. "Two-thirds of the growth seen is the underlying volume growth, while the rest can be attributed to price hikes," he added. 

Rs crore	Revenue Q4		Operatig margins
Revenue	Mar-06	Mar-05	Mar-06	Mar-05
Soaps and detergents	1,318.58	1,136.79	11.55	11.44
Personal products	765.86	602.62	24.39	23.96
Beverages	317.66	302.41	19.52	20.95
Processed foods	88.19	67.35	0.35	(3.06)
Ice creams	26.45	20.39	3.18	(15.15)
Exports	275.53	342.14	2.90	1.76
Others	34.02	70.36	(14.84)	(3.94)

The company's FMCG sales grew 18.3 per cent during the quarter, driven by 20 per cent growth in the home and personal care business and 10.8 per cent growth in foods. Processed foods grew by about 30 per cent and beverages, by 5 per cent.

HLL's advertising and promotion spend for the quarter was significantly higher by 45 per cent at Rs 303.34 crore when compared to the corresponding quarter last year as a result of increased focus on its brands.

Harish Manwani, chairman, HLL said, "Growth momentum in the FMCG markets has sustained and we continue to grow ahead of the market. We have registered robust sales growth across categories. We remain on course in terms of strengthening our brand portfolio and improving our competitiveness in the marketplace."

Manwani said the company would continue to judiciously use the levers of pricing, cost management and brand investment to sustain profitable growth.

"But cost pressure from high crude oil prices remains. There is a clear upward revision in transportation costs and we will continue to invest in our brands by way of advertising," Sundaram pointed out.

The better-then-expected results cheered investors in a highly volatile Bombay market. The HLL stock closed at Rs 290.65 on the BSE, 1.18 per cent higher than yesterday's close of Rs 287.25.

Share prices of HLL, 52-percent owned by Anglo-Dutch Unilever Plc, have gone up 38 per cent during the January-March quarter, beating 34.2 percent gain for the sector index and a 20 percent rise for the BSE index.