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ShareMumbai: FMCG companies have reported good numbers for the quarter ended September, although Hindustan Unilever (HUL), the largest player in the space, missed street estimates.
HUL's revenues were below street expectations and fell 5% year on year, driven by subdued performance in the core home and personal care segment and a 23.3% drop in export revenues due to planned reduction in non-core exports. Sales volume in its core FMCG business rose just 1%. Operating profit margins expanded by 262 basis points (100 basis points make one percentage point) to 14.4%, led by a decline in raw material and overhead costs. Price of key raw materials such as palm oil and HDPE (packing material) were soft in September. Net profit increased 28.7%, adjusting for exceptional items.
Nestle India's numbers were above street expectations, with revenues rising 17.6%. Domestic revenues, which accounted for 93.4% of the pie, increased 18%. Export revenues grew at a slower 11.2%. Operating margins increased 158 basis points to 20.3%. Operating performance was helped by a favourable sales mix, lower commodity prices (except for milk solids, green coffee, vegetable fats and sugar) and better net realisations. Profit increased 38.7%, helped by strong operating performance and tax benefits.
ITC saw revenue increase 14.1%, above estimates, driven by an increase of 15% in cigarettes business and 19% in agri-business. Cigarettes business volumes were up 7% on good performance of the premium portfolio. Operating performance was strong, with margins expanding by 616 basis points to 35.8%, helped by a decline in raw material and overhead costs. The paperboards business also performed well, while hotels and FMCG business reported a muted performance at the earnings before interest and tax level. Net profit increased 25.8%.
Dabur India's revenues increased 22.7%, riding on a 14.2% growth in volumes. The consumer care business accounted for 68% of total revenues and increased 16.9%, led by shampoos, hair oils, health supplements, toothpastes and the foods segment. Revenues from international business accounted for 20% of the revenues and increased 27.5%. Decline in input costs resulted in a 263 basis points increase in operating margins to 20.7% from 18.1% last year.
