MUMBAI : Hindustan Unilever Ltd’s (HUL's) shares dropped close to 2% on Wednesday, which can be attributed to profit booking given that the stock had gained about 12% in the past one month in anticipation of potential positive announcements in the Union Budget 2024-25. It should be noted that the commentary of HUL’s management while announcing the June quarter (Q1FY25) results on Tuesday after market hours, though not too exciting about business conditions, is largely positive. The management said it expects FMCG sector and rural demand to continue improving gradually.
FMCG is fast-moving consumer goods. Further, the forecast of above-normal monsoon and better crop realization augur well, said the management. The company’s underlying volume growth stood at 4% in Q1, much better than the 2% growth seen in each of the previous three quarters.
However, pricing growth continued to be under pressure. Pricing declined by about 2% in Q1, marking the third straight quarter of drop in the measure. Accordingly, HUL’s operating revenue growth was just about 2% year-on-year with the personal care business revenue declining by 4.5%.
So, what fuelled volume growth? The fabric wash category within the home care business saw high-single digit volume growth. In the beauty and wellbeing business, hair care clocked double-digit volume growth led by Clinic Plus, Sunsilk and Dove. A key highlight is that soaps saw low-single digit volume growth vis-à-vis a high-single digit decline in Q4FY24.
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