HUL Out Of The Woods In Q1 As Volumes Gain Pace

Co cycling out of some of the toughest periods in last few years: Rohit Jawa

- Suneera Tandon

Consumption engines are coming to life in India's urban and rural markets, powering sales at Hindustan Unilever Ltd (HUL) after several dismal quarters. India's largest packaged consumer goods maker scored growth across all its verticals, beating Street estimates on sales and profit as it looked ahead to sunny days.

Sales volumes at the maker of Lux soaps and Knorr soups grew 3% after three quarters of slowing growth, as the consumption-focused company gained from tax rebates for the middle class, lower interest rates, the start of rains, and its own entry into new segments. Net profit rose 8% to ₹2,732 crore on a 4% sales jump to ₹15,747 crore. Investors cheered the earnings, lifting HUL shares by 3.48% to ₹2,521.85 at close.

Rohit Jawa, HUL's outgoing chief executive officer (CEO) and managing director (MD), listed several key factors that are expected to boost consumer spending. Among these are income tax rebates, and lower repo rates that trim housing loan EMIs and boost purchasing power. He also noted that decreasing food inflation is providing much-needed relief to consumers.

Consequently, HUL anticipates that the first half of the current fiscal year will outperform the second half of the previous one. "We feel that we are now cycling out some of the tough periods in the last few years," Jawa told reporters at HUL's Mumbai headquarters.