(Bloomberg) -- Unilever Plc’s Indian unit reported quarterly profit that met analyst expectations as price hikes helped Asia’s largest consumer goods maker by market value manage persistent inflationary pressures.
The Mumbai-listed Hindustan Unilever Ltd. posted a 17% rise in net income to 22.4 billion rupees ($300.6 million) for the quarter ending Dec. 31, according to an exchange filing Thursday, exactly in line with the average profit forecast by analysts in a Bloomberg survey. Revenue rose 10% to 129 billion rupees while total costs rose 8.3%. It saw a volume growth of 2%.
“We have delivered a strong and resilient performance in the quarter despite moderation in market growths and significant levels of commodity inflation,” Sanjiv Mehta, the company’s chairman and managing director, said in a statement, adding that the operating environment in the near-term “will continue to remain challenging.”
The maker of Hellmann’s mayonnaise and Dove soap, like its parent unit, has been roiled by rising input costs amid a global supply chain disruptions. India’s retail inflation climbed for the third straight month in December. While prices of key raw materials including palm oil and crude oil-based packaging have spiked, Hindustan Unilever has passed on some of it to consumers in product categories such as soaps and detergents in the last quarter.
“Fast-moving consumer goods companies have taken price hikes to the tune of 5-15% in the last six months to pass on high commodity inflation,” Sanjay Manyal, an analyst at ICICI Securities Ltd. in Mumbai, wrote in a sector report last week. “It is difficult to call out at this time that commodity inflation has peaked out.”
Hindustan Unilever’s shares closed 2.1% down on Thursday before the results were published, pushing this year’s decline to 4.2%. The stock is also underperforming compared to India’s benchmark BSE Sensex Index, which has gained 2.1% in 2022.
As Unilever contends with global inflationary pressures, Chief Executive Officer Alan Jope told reporters earlier this week that the parent company plans to sharpen its focus on health and hygiene. However, Jope faces growing pressure to deliver a new strategy after investor dissent forced the firm to walk away from a bid for GlaxoSmithKline Plc’s consumer products division on Wednesday.
(Updates with chairman’s comments in the third paragraph.)
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