One of the country's largest consumer goods manufacturing companies, Hindustan Unilever Limited (HUL), has maintained its successful business trajectory. The company released its financial report for the third quarter of the current fiscal year on Thursday. Compared to last year, the company's net profit increased by 120 per cent during this period, reaching ₹6,603 crore.
What is the real reason behind the profit increase?
Last year during the same period, the company's profit was ₹2,989 crore. There is a specific reason behind this doubling of profit this time. Hindustan Unilever has separated (demerged) its ice cream business from the parent company. As a result of this process, the company has made an exceptional gain of ₹4,611 crore. This has directly impacted the company's profit.
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Take a look at the company's financial overview:
Total revenue: Increased by 5 per cent from last year's ₹15,788 crore to ₹16,580 crore.
EBITDA: Increased by 3 per cent to ₹3,788 crore.
Margin: However, due to increased raw material costs, the profit margin has slightly decreased (from 24% to 23.3%).
Ice cream business and new investments
The company has completed the demerger process of their popular ice cream brand Kwality Walls. Very soon, it may be listed as a separate company on the stock exchange. Additionally, the company has announced taking complete ownership of the nutrition brand OZiva. However, due to not achieving expected results, Hindustan Unilever has announced its decision to exit Wellbeing Nutrition.
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Regarding the financial results, the company's Managing Director and CEO, Priya Nair, said, "Despite adverse market conditions, our business has grown. By separating the ice cream business, we will be able to focus more on our core business. Fully acquiring OZiva and exiting from less profitable businesses is part of our capital investment strategy."
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