HUL recovers after hitting 4-month low, but still trades weak on growth concerns

Last Updated: Fri, Oct 14, 2016 13:57 hrs
Hindustan Unilever

Hindustan Unilever tumbled to Rs 838.45 this morning, hitting a four-month low, hurt by parent Unilever's weak quarterly results and its decision to lower the outlook for the Indian company, citing tepid demand and intensive competition from rivals.

At Rs 847.15, the stock is now down 1.7% from its previous closing price.

The steep hike in detergent prices and the resultant impact on volumes may have hurt the company's overall volume growth in the second quarter.

Unilever said that market conditions have softened in India, and with rising input costs pushing the company to hike prices amidst stiff competition, volumes in skin cleansing segment suffered.

The emergence of Patanjali Ayurved, promoted by Ramdev, the Yoga Guru, has cast a shadow on several companies in the Indian FMCG space and Hindustan Unilever is no exception. Unilever also cited Himalaya Herbals as a key competitor to HUL.

For the April - June 2016 quarter, Hindustan Unilever reported a 9.8% increase in net profit. However, volumes were up just 4% in the quarter.

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