MUMBAI: Sales growth at Hindustan Unilever Ltd (HUL) stayed muted for the eighth straight quarter, hurt by a sluggish economy, and India’s largest consumer goods maker said it did not expect a demand recovery in the near-term.
The company’s results came after parent Anglo-Dutch consumer group Unilever Plc , which generates more than half of its revenue in developing markets, said emerging markets sales rose 6.6 percent, slower than the 8.4 percent growth in the fourth quarter. “The pace of growth in the market is slow and there is a high level of inflation hurting consumer wallets,” R Sridhar, chief financial officer said on a conference call.
“It will be difficult to say when will there be an improvement in consumer sentiment but we are hoping it is going to be sooner rather than later,” he said.
A normal monsoon, key to rural demand, and pre-election spending on consumer goods to woo voters in Asia’s third-largest economy, failed to lift consumer spending as surging commodity prices and meagre salary increases weighed on incomes.
“The performance is deteriorating every quarter and it is causing more worry than it typically should because it’s two years in a row with no recovery in sight, said G Chokkalingam, founder of research and fund advisory company Equinomics.
HUL, which manufactures Fair & Lovely fairness cream and Sunsilk shampoo, said net profit for the quarter grew 11 percent to Rs8.7bn ($143.4m). Net sales rose 8.9 percent year-on-year to Rs69.4bn. Analysts on an average estimated a net profit of Rs8.5bn on sales of Rs70bn. Overall sales volumes in the quarter grew 3 percent, below market estimates of 5 percent growth and lower than the 6 percent growth logged a year ago. Reuters
