Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Hindustan Unilever’s Profit Beats Estimates as Demand Revives

Published 10/20/2020, 05:01 AM
Updated 10/20/2020, 05:45 AM
© Reuters.  Hindustan Unilever’s Profit Beats Estimates as Demand Revives

© Reuters. Hindustan Unilever’s Profit Beats Estimates as Demand Revives

(Bloomberg) -- Hindustan Unilever (NYSE:UL) Ltd., Asia’s biggest maker of personal care products by market value, reported a 8.6% gain in profit, exceeding analysts’ estimates as demand recovered in India following the world’s biggest lockdown.

Net income at the local unit of Unilever NV rose to 20.1 billion rupees ($273 million) in the quarter ended Sept. 30, the company said in a filing to exchanges. That compares with a 19.1 billion rupees profit forecast by analysts surveyed by Bloomberg. Revenue rose 16% to 112.8 billion rupees while the volume growth was a mere 3%.

Many global economies are seeing a rapid revival in consumer demand. U.S. retail sales rose in September at the fastest pace in three months, with China also seeing a rebound. Good monsoon rains and resumption of business activity following the world’s biggest lockdown helped Hindustan Unilever, which sells its products through 8 million outlets in India. The maker of Dove soap and Surf detergent also benefited from the integration of GlaxoSmithKline (NYSE:GSK) Plc’s local consumer business in April.

“Over the past few months, there has been a steady improvement in the overall economic activity,” Jefferies (NYSE:JEF) India Pvt. analysts led by Vivek Maheshwari wrote in a report on Thursday. “With further improvement in macro, we expect that there should be an improvement in HUL’s earnings.”

The optimism is yet to translate into gains for investors. Hindustan Unilever’s shares have added 8.1% since Prime Minister Narendra Modi first imposed the lockdown in March, underperforming the S&P BSE Sensex’s 52% advance in the period.

Britannia Industries Ltd., India’s biggest maker of packaged food, on Monday reported a lower-than-estimated 23% jump in profit from the year ago period, while sales rose 12% to 34.2 billion rupees.

“We got our full range of products to the market,” in the quarter, Varun Berry, managing director at Britannia said in a statement. The company “inched closer to normalcy in advertisement & promotions.”

Still, India’s economic growth forecast was slashed further by the International Monetary Fund this month. Gross domestic product will shrink 10.3% in the fiscal year to March 2021, the Washington-based lender said.

“The underlying weakness in the labor market is worrying,” Sonal Varma, chief economist for India and Asia, ex-Japan at Nomura Holding Inc. in Singapore said in a report. “It reflects continued pressure on household incomes, which can be a medium-term headwind for consumer demand.”

©2020 Bloomberg L.P.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.