MUMBAI Jan 22 Hindustan Unilever Ltd (HUL)
, India's largest consumer goods maker, reported a 16
percent jump in third-quarter net profit, but low volume growth
and a rise in royalty payments knocked its shares down as much
as 5 percent.
Less discretionary spending among consumers cut sales of
products such as packaged foods and personal care items, but
higher prices and lower raw material costs aided margins.
The Indian unit of Anglo-Dutch conglomerate Unilever Plc
said its net profit rose to 8.7 billion rupees
($161.7 million) for the fiscal third quarter ending Dec. 31,
from 7.5 billion rupees a year earlier.
HUL's shares have fallen over 10 percent in the December
quarter partially on concerns it may have to pay more in
royalties, in line with Unilever in Indonesia, a move the
company confirmed on Tuesday.
The royalty HUL pays to its parent company for use of its
trademarks will gradually increase by March 2018 to around 3.15
percent of turnover, from the current 1.4 percent, it said in a
The Indian company, valued at $19.5 billion, makes popular
brands including skin creams Fair and Lovely, Sunsilk shampoo,
Lux soap and Kissan ketchup.
Analysts had estimated a profit of 8.8 billion rupees on
sales of 65.7 billion, Thomson Reuters Starmine Estimates
HUL stock trades at 28.5 times its 12-month forward
earnings, compared with peers ITC's 25.5 times, and
Godrej Consumer's 26.5 times, according to Thomson
Reuters Starmine Smart Estimate.