MUMBAI: Overcoming increasing cost and margin pressures, Hindustan Lever Ltd. (HLL) reported a growth of 17.7 per cent in its profit after tax at Rs. 383 crore (Rs. 325.35 crore) in the third quarter ended September 2006. After including exceptional items of Rs. 137.74 crore, the net profit was up 60 per cent at Rs. 520.74 crore. Net sales were up 12.2 per cent at Rs. 3,066.01 crore (Rs. 2,731.54 crore). The operating profit (profit before interest and taxation) was up 19.3 per cent at Rs. 412.52 crore (Rs. 345.74 crore).

Exports were up 20 per cent at Rs. 327.37 crore (Rs. 273.10 crore). D. Sundaram, Finance Director, said export margins were up partly due to the Lipton India Exports Ltd. (LIEL) merger impact and partly due to the improvement in margins of speciality exports such as marine, castor and rice. The fast moving consumer goods (FMCG) business grew by 14.2 per cent during the quarter and sales growth in continuing business, that is, after eliminating impact of disposals, was 13.8 per cent. Sales in the home and personal care (HPC) business grew 15 per cent at Rs. 2,231.44 crore with all categories growing at double digits driven by volume growth and a better product mix.

The highly competitive laundry category continued to do well particularly in the premium segment. According to Mr. Sundaram, "Laundry growth has been strong but margin pressures remain because the input cost escalation is quite a bit due to it being a petro-based product."

The foods business grew by 10.7 per cent at Rs. 473.79 crore with both tea and coffee in the beverages segment growing by six per cent.

The Kissan portfolio and Knorr soups led the growth in the processed foods segment, which grew 18 per cent, and the ice cream business grew by 44 per cent.

"Unilever has a lot of platforms in the foods business. We will drive foods as an important leg of our business, including beverages. We need more products in our portfolio to scale up in foods and we are evaluating the possibility of building up the processed foods business."

Printer friendly page  
Send this article to Friends by E-Mail