Hindustan Unilever Ltd., the Indian unit of the global consumer goods giant, posted quarterly profit that beat analyst expectations as price hikes and a one-time gain helped blunt the impact of soaring input costs.
The Mumbai-based arm of Unilever Plc reported an almost 9% rise in net income to 23.3 billion rupees ($304.5 million) for the quarter ended March 31, according to an exchange filing Wednesday. That was higher than the average profit forecast of 22 billion rupees by analysts in a Bloomberg survey. The earnings were also boosted by a one-time gain of 580 million rupees.
Revenue also beat estimates and rose by 10% to 131.9 billion rupees. Total costs surged 11% to 105.1 billion rupees.
Consumer goods companies across India are battling a demand slowdown and intense inflation stoked by record energy costs, broken supply chains and the war in Ukraine. Most, including Hindustan Unilever, have resorted to increasing the price of household staples from cookies to milk in a bid to to protect margins and pass on some of the pain to buyers. India’s headline inflation touched a 17-month high of nearly 7% in March.
Suresh Narayanan, the chairman of rival Nestle India Ltd., last week said the costs of key packaging and raw materials were at 10-year highs, with inflationary pain likely to continue over the short to medium term.
A ban on palm oil exports by Indonesia, the world’s biggest producer, to come into effect on Thursday will likely cause further havoc for consumer goods makers in the coming quarter.
Leading global importer India buys about 8 million metric tons of the edible oil annually, about half of which comes from Indonesia, according to an April 24 note from Jefferies India.
"Indian consumer staples have been grappling with high inflation and volatility in input pricing,” Jefferies India analysts led by Vivek Maheshwari wrote in the report, which pointed to Hindustan Unilever as one of the most-exposed firms. "This development would exacerbate pressures.”
