Hindustan Unilever shares decline over 2% as rural volume growth bites

Shares of Hindustan Unilever Ltd fell over 2% on Friday after the company reported a marginal decline in consolidated net profit for the second quarter ended September 30. The stock declined 2% to Rs 2,495.10 on the BSE.

Hindustan Unilever on Thursday reported a marginal decline in consolidated net profit to Rs 2,657 crore for the second quarter ended September 30 amid subdued rural demand and heightened competitive intensity. The company had posted a consolidated net profit of Rs 2,670 crore in the same quarter last fiscal, Hindustan Unilever Ltd (HUL) said in a regulatory filing.

Its volumes grew 3% in urban areas for the quarter, and fell by 1% in rural areas. Rural recovery is likely to remain gradual, the company said in its investor presentation.

Total income stood at Rs 15,806 crore in the quarter under review, compared to Rs 15,253 crore in the year-ago period, it added.

Total expense in the second quarter was higher at Rs 12,211 crore against Rs 11,965 crore a year ago.

"We delivered resilient and competitive growth whilst stepping up our EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) margin in a challenging operating environment, marked by subdued rural demand and heightened competitive intensity," HUL CEO and Managing Director Rohit Jawa said.