* Q2 net profit at 8.07 bln rupees vs 7.5 bln estimate
* Shares fall as much as 2.9 percent after results
By Nandita Bose
MUMBAI, Oct 26 Hindustan Unilever Ltd,
India's largest consumer goods maker, posted a
better-than-expected 17 percent rise in net profit but
disappointing sales volumes sent the company's shares down as
much as 2.9 percent.
"There has been some slowdown in discretionary spending
categories such as pastes, food, etc., which has had an impact
on volumes," R.Sridhar, chief financial officer, told reporters
The Indian unit of Anglo-Dutch conglomerate Unilever Plc
said its net profit rose to 8.07 billion
rupees ($150.4 million) for the fiscal second quarter ending
Sept. 30, from 6.89 billion a year earlier.
Net sales for the quarter rose 11.6 percent to 61.55 billion
rupees, with 7 percent underlying volume growth. The market was
expecting volume growth of 8 percent, according to analysts.
Analysts on average had estimated a profit of 7.5 billion
rupees on sales of 63.2 billion, Thomson Reuters Starmine
"Volume growth has been impacted because there was some
delay in monsoon (rains) and that has had a marginal impact,"
said G. Chokkalingam, chief investment officer at Centrum Wealth
Management. He does not own HUL shares.
He said the stock was also correcting on Friday, as it has
risen about 25 percent since July.
HUL, valued at $22.9 billion, makes popular brands such as
skin fairness cream Fair and Lovely, Clinic Plus shampoo, and
soap brands such as Dove.
Indian consumer goods makers face a difficult choice between
raising prices and retaining market share as inflation and weak
consumer sentiment pinch margins and price increases hurt
HUL's operating margins in the quarter rose 100 basis points
from a year ago, with its operating profit rising 19 percent,
slowing from the June quarter.
Sales at the home and personal care segment grew 12 percent,
while its foods business grew 10 percent.
Shares in the company, which have risen 36 percent since the
start of 2012 compared with a 42 percent rise in the BSE FMCG
index, ended 2.1 percent lower on Friday.
The company trades at 32.7 times its 12-month forward
earnings, compared with 15.9 times for ITC Ltd, 32.9
times for Nestle and 25.4 times for Godrej Consumer, Thomson
Reuters Starmine Smart Estimate showed.