Better operating margins have helped consumer goods major Hindustan Lever Ltd (HLL) overcome a topline dip and notch a 11.2 per cent increase in profit-after-tax to Rs 420.13 crore for the third quarter of 2002 on a comparable basis.
HLL's net profit has grown by 3.5 per cent at Rs 413.29 crore (Rs 399.17 crore). Sales for the quarter declined by 7.2 per cent to Rs 2,367.46 crore (Rs 2,551.4 crore).
In terms of third quarter revenue, soaps & detergents and personal products were the only two segments, which had positive growth, the others including beverages, ice creams, exports and foods including oils & fats, culinary & branded staples being negative.
Soaps & detergents, personal products, exports and beverages reported profit increase. In foods, HLL pruned losses to Rs 7.37 crore (loss of Rs 9.73 crore) and in ice-cream, losses were brought down to Rs 1.58 crore (loss of Rs 8.63 crore).
From the traditional product line-up, Lifebuoy's showed a 35-per cent growth in third quarter, sustained good showing by Lux, reduced decline of Rin and Fair & Lovely's 43- per cent growth. In shampoos, where serious setback happened earlier, the company has regained ground, using products tailored for the right price points.
HLL's power brands accounted for 80-85 per cent of its sales revenue. The company plans to push its regionally strong "local jewels'' as well.
According to analysts HLL will now be confronted with the issue of topline growth. Its foods business, on which HLL was quite bullish, has de-grown. In a scenario of declining topline growth, rise in operating margins is not sustainable.