BCCL
Shares of consumer product giant Hindustan Unilever corrected in the last 30 days on rising inflation leading to cautious demand. Although the company reported a 9% year-on-year growth in net profit to ₹2,187 crore as against ₹2,009 crore in the same quarter last year, investors were disappointed on lower than expected volume growth.
The food segment that includes products like Horlicks, Kissan, Bru, Kwality Wall’s saw a slowdown in revenue growth. Adding to it, the company gave a cautious remark on the demand recovery. “Looking forward, we remain cautiously optimistic about demand recovery,” said Sanjiv Mehta, chairman and managing director of HUL.
“Gross margin pressure continued in the September quarter due to elevated commodity costs (crude, crude palm oil, tea, and plastic) and higher freight cost. We expect the margin to remain under pressure in the near term, owing to sustained inflation and calibrated price hikes,” said analysts at HDFC Securities while maintaining a ‘reduce’ rating on the stock.