Hindustan Unilever Ltd., India’s largest consumer goods company, reported quarterly profit that missed analyst estimates as inflationary pressures continued to weigh on demand.
(Bloomberg) — Hindustan Unilever Ltd., India’s largest consumer goods company, reported quarterly profit that missed analyst estimates as inflationary pressures continued to weigh on demand.
The Mumbai-based unit of Unilever Plc posted a 9.4% rise in net income to 25.5 billion rupees ($312 million) for the quarter ending March 31, according to an exchange filing on Thursday. A Bloomberg survey of analysts had forecast an average profit estimate of 26.37 billion rupees.
Revenue rose 11% to 146.4 billion rupees compared with the same period last year, while costs also climbed 11% to 117.1 billion rupees. It posted a volume growth of 4% for the quarter, the filing said.
The disappointing earnings dent earlier claims by outgoing Chief Executive Officer Sanjiv Mehta that the maker of Dove soaps and Lipton tea had seen through the worst of India’s inflationary headwinds. Indian consumers have also been hit by rising interest rates that has curbed their spending power.
IMF Sees Slowing Consumption Hitting India’s Growth Momentum
Consumption demand in India is cooling even though the pandemic’s impact on the economy was short-lived, Nada Choueiri, the International Monetary Fund’s mission chief in India, told Bloomberg Television in April.
“The demand pick-up is visible only in select segments where price cuts have been implemented,” analysts at Mumbai-based brokerage Systematix Shares & Stocks India Ltd., led by Himanshu Nayyar, wrote in a report earlier this month. “A full recovery still seems some time away.”
Meanwhile, Hindustan Unilever, like its London-based parent, is undergoing a management shift as Mehta retires after a decade-long stint at the top. He will be replaced by Rohit Jawa, who was most recently the chief of transformation at Unilever in London. Jawa begins a five-year term at the Indian unit at the end of June.
Unilever Names Jawa as Successor to CEO Mehta in Key Indian Unit
Jawa is set to take over as Unilever faces fierce competition in India from Mukesh Ambani and Gautam Adani — two of the country’s most powerful billionaires — as well as sprawling conglomerates such as the Tata Group, which are all expanding rapidly across the sector.
Hindustan Unilever’s shares were largely unchanged in the March quarter while S&P BSE Sensex slipped 3%, data compiled by Bloomberg show.
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