While HUL was aided in part by a lower year-ago base in the September quarter, volume growth in the second quarter of 2017-18 was 4 per cent. The company admitted that it had taken price hikes very judiciously (around 2-3 per cent only in the July-September period), amid an increasingly challenging environment. The calibrated price hikes in the period under review aided volume growth, though the trend could change, the company said.
"The volatility on crude and currency is growing," said Sanjiv Mehta, chairman and managing director at HUL. "They are key monitorables as we go ahead. Price hikes so far (by the company) have been very judicious. However, calibrated price hikes could increase as the volatility on crude oil grows, though benign vegetable oil prices, such as palm oil, are partially offsetting it," he added.
Since January, the rupee has depreciated 13 per cent, touching Rs 73.57 on Friday. Crude oil, on the other hand, has inched up 21 per cent, touching around $81 a barrel.
Mehta said the company's three product divisions - home care, beauty and personal care, and food and refreshments - had delivered broad-based, double-digit growth. He said this was driven by demand coming from rural India, which was ahead of urban growth.
"Rural growth is ahead of urban growth by 1.25 times (in the September quarter). But we will have to wait and see how the rural demand scenario pans out in the forthcoming quarters given that the monsoon season has been below-normal this year," Mehta said.
The 2018 monsoon season ended in September, recording below normal rainfall to the tune of 91 per cent of the long period average (LPA), weather forecaster Skymet said.
HUL derives 40 per cent of its sales from rural areas and 60 per cent from urban areas. On the operational front, Ebitda (earnings before interest, tax, depreciation and amortisation) grew by 20 percent to Rs 20.19 billion and Ebitda margins expanded 170 basis points to 21.9 per cent, compared to the year-ago period.
HUL said its board of directors had declared an interim dividend of Rs 9 per share for the year ending March 2019. The company appointed Leo Puri an independent director, which will be effective from Friday.
The company's shares closed at Rs 1,568.65, up 2.63 per cent from the previous day's close at the BSE. The second quarter earnings were announced after market hours.