HUL Q3 FY15 shows 22.4% decline in profits despite 16.4% increase in ad spends

HUL’s advertising and promotional expenses soared from Rs 971.7 crore in Q3 FY14 to Rs 1137.79 crore in Q3 FY15. While the net profits witnessed a decline from Rs 1,252.17 crore in Q3 FY14 to Rs 971.4 crore this fiscal.

HUL Q3 FY15 shows 22.4% decline in profits despite 16.4% increase in ad spends

Hindustan Unilever Limited recently announced its results for the quarter ending 31st December 2015. During the quarter, there was a 16.4 per cent increase in advertising and promotional expenses from Rs 971.7 crore in the same quarter last year to Rs 1137.79 crore in Q3 FY15. However, this increase in ad spend  did not reflect in the net profits for the same period which witnessed a decline of 22.42 per cent from Rs 1,252.17 crore in the same quarter last year to Rs 971.4 crore this fiscal.

During the quarter, turnover grew at 3 per cent with 6 per cent underlying volume growth. The growth in the quarter continued to be impacted by the phasing out of excise duty incentives and price de-growth, as the benefit of lower commodity costs was passed on to consumers.

Despite robust spending on advertisement and sales promotion, it has been a challenging quarter for the FMCG giant with net profits taking a dip. Now, it remains to be seen how the coming quarters will unfold for the company.

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