Thu Oct 24 16:00:40 UTC 2024: On October 24, 2024, shares of Hindustan Unilever Ltd (HUL) dropped by 6% after the company reported a 2.3% decline in consolidated net profit for the September quarter, totaling ₹2,595 crore, down from ₹2,657 crore in the same period last year. The decline in profit accompanied a slower volume growth of 3%, which fell short of market expectations of 4%. HUL’s sales growth was also modest at 2% during the quarter.
The dip in stock price was part of a broader trend in the FMCG sector, with HUL among the top losers alongside other notable companies such as SBI Life and Hindalco. As of the latest update, HUL shares were trading at ₹2,481.70, reflecting a significant drop.
Additionally, HUL announced plans to separate its ice cream business, which includes brands like Kwality Wall’s and Cornetto. This move is aimed at allowing the ice cream segment, contributing 3% to the company’s turnover, to attract necessary investments to unlock its growth potential. The company noted that the current operating model and market landscape for ice cream diverges from its other businesses, necessitating a separate operational structure.
The company also indicated a cautious outlook for the upcoming quarter, suggesting that urban demand pressures may persist amid a low single-digit price growth forecast due to inflation in key materials.
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