Bloomberg News

Hindustan Unilever Net Beats Estimates on Soaps, Shampoos

May 02, 2012

Hindustan Unilever Ltd. (HUVR), the Indian unit of the world’s second-largest consumer goods company, surged to a record after profit rose 21 percent, exceeding analysts’ estimates.

Net income jumped to 6.87 billion rupees ($130 million) in the quarter ended March 31, from 5.69 billion rupees a year earlier, the Mumbai-based maker of Sunsilk shampoo and Knorr soups said in a statement yesterday. That beat the 6.44 billion- rupee median of 30 analysts’ estimates compiled by Bloomberg.

Shares of the company climbed as much as 3.9 percent to 433.9 rupees in Mumbai trading, the highest since at least January 1991. They were up 2.6 percent as of 12 p.m. The stock has risen 5.1 percent this year, compared with a 12 percent advance in the benchmark Sensitive Index. (SENSEX)

The introduction of high-end products and higher sales of laundry detergents boosted revenue by 16 percent to 56.6 billion rupees. The company wants to boost sales of products such as fabric conditioner and face wash, Chief Executive Officer Nitin Paranjpe said in an interview in February.

“Personal products continue to do well, largely driven by volume growth,” said Sameer Narang, an analyst at HDFC Securities Ltd. “In the soaps and detergent business also they have been able to get some volume traction.”

Soaps, Detergents

Revenue from selling soaps and detergents rose 29 percent to 28.3 billion rupees in the fourth quarter. Sales of personal- care products gained 17 percent to 17.1 billion rupees.

Higher sales of shampoos such as Sunsilk and skin products such as Ponds boosted the personal-care products’ business, Chief Financial Officer Sridhar Ramamurthy said on a call with reporters. Higher volumes and price increases drove up soaps and detergents revenue, he said.

“They’re trying to premiumize their product portfolio,” said Shivani Mehra, an analyst with Techno Shares & Stocks Ltd. “The premiumization would lead to growth, with different product launches.”

Parent Unilever (ULVR) on April 26 reported first-quarter revenue growth that beat estimates and outstripped competitors Danone (BN) and Nestle SA (NESN), led by Dove skincare and Tresemme hair products. Underlying sales, which exclude acquisitions, disposals and currency fluctuations, grew 8.4 percent from a year earlier.

To contact the reporter on this story: Malavika Sharma in New Delhi at msharma52@bloomberg.net

To contact the editor responsible for this story: Stephanie Wong at swong139@bloomberg.net


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