HUL Reports 19% Profit Growth in Q3, Acquires 90.5% Stake in Minimalist for ₹2,955 Crore

Its biggest FMCG company announced the acquisition of a 90.5% stake in direct-to-consumer beauty brand Minimalist for Rs 2,955 crore, with the remaining 9.5% stake to be acquired from its founders, Rahul and Mohit Yadav, within two years.

Hindustan Unilever Ltd (HUL) reported on Wednesday that its net profit had gone up 19% in the third quarter of this fiscal, to Rs 3,001 crore from Rs 2,519 crore, compared to the same period a year ago.

Its biggest FMCG company announced the acquisition of a 90.5% stake in direct-to-consumer beauty brand Minimalist for Rs 2,955 crore, with the remaining 9.5% stake to be acquired from its founders, Rahul and Mohit Yadav, within two years.

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The profit growth of Q3 has been mainly on account of one-time gain of Rs 509 crore from the sale of Pureit business. If this one-time gain were not included, then PBT would have grown by 16 per cent to Rs 3,978 crore, said the company in its exchange filing.

The acquisition of Minimalist and the demerger of the ice cream division are part of our long-term growth strategy in the Indian FMCG sector," said Rohit Jawa, CEO and Managing Director of HUL.

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However, the profit after tax before exceptional items remained flat at Rs 2,540 crore in Q3 compared to the same period a year ago.

HUL's revenues in Q3 were up by 2 per cent to Rs 15,195 crore. For home care, the company said the underlying sales growth expanded 6 per cent.

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Jawa stated that FMCG demand trends continue to be subdued with a continued moderation in urban growth while rural has managed to sustain its gradual recovery.

He pointed out, "In this operating context, we delivered competitive growth by driving unmissable brand superiority, investing behind brands and capabilities whilst maintaining healthy margins."

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Volume growth in this business was led by categories such as fabric wash and household care. Nevertheless, the total volume growth of the company went flat due to a negative product mix.

The operating profit witnessed a modest growth of 1% year-over-year to Rs 3,570 crore as the company witnessed its margins at a decline by 20 basis points at 23.5 per cent.
The shares of HUL on the NSE closed at Rs 2,340 on Wednesday after a very minor dip.

Read also| Wipro's Q3 Net Profit Increases 4.5% to Rs 3,254 Crore

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Read also| Infosys Reports 11.5% Net Profit Growth, Reaching Rs 6,806 Crore in Q3

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