New Delhi: Ahead of the first budget of the new decade to be presented by Finance Minister Nirmala Sitharaman, rural demand seems to be denting Hindustan Unilever Ltd (HUL). The Indian unit of Anglo-Dutch consumer group Unilever Plc UNc.AS missed market expectations for quarterly profit on Friday.
Consumer price inflation in India has ticked up to a five-year high, making Indian consumers, several of whom make less than Rs 100 a day, cut back on discretionary spending.
HUL, Asia’s largest consumer goods maker by market capitalisation, is a barometer of Indian consumer sentiment because it sells products such as Lux soap, Lipton tea and Dove shampoos through thousands of mom-and-pop stores as well as big retailers across the country.
Profit after tax increased 12 percent at Rs 1,616 crore, falling short of market expectations.
The company, along with its global parent, announced a major review of its tea division. The strategic review of the tea division is expected to finish by mid-year and “will consider all options” for the future of the business, Unilever said on Thursday.
HUL, whose overall market growth slowed down in the personal wash, or soap, category, will raise prices by up to 6 percent in the March quarter for these products.
Shares of HUL ended at Rs 2,034.15, down Rs 24.30, or 1.18 percent, on the Bombay Stock Exchange.