Hindustan Unilever Ltd said on Thursday it is relying on cost cuts and price hikes to counter commodity and currency volatility stemming from the Middle East war, after reporting an 18% jump in quarterly profit.
Rising raw material costs, exacerbated late in the March quarter by a conflict-driven spike in crude prices, are squeezing margins for consumer goods makers, just as demand was recovering.
"Heightened geopolitical tensions have led to commodity and currency volatility," Priya Nair, CEO and managing director, said, adding Hindustan Unilever is balancing price increases, cost savings and advertising spending to offset "short-term impacts."
Shares reversed course to trade nearly 3% lower after the results, making the stock the third-biggest loser on the benchmark Nifty 50 index in a broadly weaker market.
The pressures reflect a broader industry trend, with peers such as bottled water maker Bisleri and Fortune cooking oil maker AWL Agri Business also leaning on price increases to shield margins.
However, the Dove soapmaker maintained its mid-term forecast for consolidated core earnings margin.
For the fourth quarter ended March 31, the domestic unit of UK's Unilever said its profit rose to 29.30 billion rupees ($307.57 million), helped by consumption tax cuts.
Revenue climbed 7% to 155.99 billion rupees, supported by its mainstay home-care business - home to brands such as Comfort and Vim - whose revenue increased 9%.
Looking ahead, the consumer goods major expects its fiscal 2027 performance to be better than the recently concluded financial year, as it sharpens its focus on premium products and doubles down on "fewer, bigger bets" including its Horlicks protein drink. It did not provide further details.
Earlier this month, rival Nestle India posted a 26% increase in quarterly profit on demand for KitKat chocolates and Maggi instant noodles, while Wilmar International's AWL reported earnings above estimates. ($1 = 95.2638 Indian rupees) (Reporting by Praveen Paramasivam in Chennai; Editing by Sonia Cheema)
