Hindustan Unilever Ltd.’s profit rose, beating estimates, but input cost pressures continued to weigh on its margin.
Volume growth came in at 6% in the first quarter of FY23 compared with a flat growth in the preceding three month.
“Optically, the volume growth in June quarter looks better than March quarter but that’s because of a low base due to Covid-19,” said Ritesh Tiwari, chief financial officer at HUL, while briefing reporters after the results.
On a three-year basis, he said, volumes were “flat both in June and March quarter, while value growth is in mid-single digits.”
Other fast-moving consumer goods peers, too, are expected to see a sequential decline in volume or a feeble growth in the first quarter amid steep price increases.
Marico Ltd., in its Q1 update, hinted at “mid-single-digit” drop in volume growth as edible oil witnessed massive downtrading. Dabur India Ltd. said it expects revenue to grow in “single-digits” for the quarter ended June on a high base and weak consumption amid soaring prices.
Godrej Consumer Products Ltd. concurred. It expects operating margin to narrow amid continued input cost inflation. But the worst, it said, seems to be over due to the recent correction in commodity prices and the “encouraging” forecast of a good monsoon.
Shares of HUL closed 0.57% up before the results were announced compared with a 0.38% gain in the benchmark Nifty 50.
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