HUL stock down on royalty woes

Shares down 1.89% in morning trade

The stock price of Hindustan Unilever (HUL) was down 1.89% in morning trade on the Bombay Stock Exchange (BSE) following concerns over increase in royalty payouts. Investors were jittery following announcement by parent Unilever that it was increasing royalty to 5% of sales from the current 3.5% in Indonesia.

The stock of the Indonesian subsidiary tanked 7% today following the announcement.

HUL pays royalty of about 1.3% of sales - one of the lowest among multinational companies in India.

Rivals such as Procter & Gamble and Colgate have higher royalty payouts.