HUL misses Q4 estimates
down, HUL slashed prices in key categories such as soaps. As a result, the company expects to report pricing growth to turn negative in the near term.
“We expect FMCG demand to continue improving gradually. Forecast of above normal monsoons, and improving macroeconomic indicators augur well. We expect our price growth to see a low single-digit decline in the near term. If commodity prices remain where they are, we envisage price growth to plateau in the mid-term and become positive—in low-single digit range— by the second-half of this financial year,” chief financial officer Ritesh Tiwari said.
Prices of crude oil, crude palm oil and tea significantly influence the company’s commodity basket.
“At this stage, commodities are benign and we’ll see what happens going forward,” he added.
The company reported a 1% rise in underlying sales growth in its home care revenues—underlying sales growth (USG) refers to the increase in turnover for the period, excluding any change in turnover resulting from acquisitions, disposal. Meanwhile, the beauty and personal care category reported a 2% dip in USG. Foods and refreshment had a USG of 4% with flat volume growth.
Commentary on rural demand remained vague. These markets, which draw significant business for consumer goods makers, have remained depressed for several quarters now.
For HUL, urban markets continued to outpace rural markets in the March quarter.
“So, overall demand for rural, I would not say it has fully recovered, but the gradual recovery that we were expecting—that we have started to see. Even this quarter, for example, was better than the previous quarter in terms of overall demand situation in rural. Overall macros are looking a little better. I’m hoping that a quarter or two down the line, with a better monsoon and continued good macro, the recovery should continue to happen,” he added.
For the full year, revenue was ₹59,579 crore with a USG of 3%. The HUL board proposed a final dividend of ₹.24 per share, subject to approval of shareholders. Together with interim dividend of ₹. 18 per share, total dividend for the year amounts to ₹. 42 per share, an increase of 8% versus 2022-23.