Hindustan Unilever reported disappointing earnings for the quarter ended 31 December, 2015. Net profit fell sharply by 22.4% year-on-year to Rs 971 crore, while revenues grew at a modest 2.7% to Rs 7,981 crore from Rs 7,774 crore in the corresponding period in fiscal 2015.
The overall volume growth was 6%.
"The growth in the quarter continued to be impacted by the phasing out of excise cuty incentives and price de-growth, as the benefit of lower commodity costs was passed on to consumers," the company said in a statement.
"Net Profit at Rs.971 crores was impacted by the exceptional income from the sale of properties in the base quarter and provisions for restructuring & select contested matters," it added.
"In an environment of moderating growth and benign input costs, we remain focused on innovation and market development to drive volumes competitively whilst improving operating margins," said Harish Manwani, Chairman, Hindustan Unilever, in his statement.
Its soaps and detergents business grew by just 1%, which was attributed to price deflation due to falling input costs, which was passed on to consumers.
Personal products grew by 5% while growth in the beverages segment remained unchanged at 7%.
Falling crude oil prices benefitted the company during the quarter under review, with cost of material dropping to Rs 2,689.39 crore, down 7.4% from Rs 2,860.63 crore in the corresponding quarter ended 31 December, 2014.
On Friday, shares of Hindustan Unilever hit a new 52-week low of Rs 776.60 on the BSE before closing at Rs 804.15, down 2.7% from its previous close.
The company's advertisement expenses fell marginally to Rs 1,137.79 crore during the third quarter ended December 2015, though the company's brands continue to figure in the list of leading brands advertised on television.
For the week ended 8 January, 2016, three of the company's brands were on the list of top 10 brands, according to Broadcast Audience Research Council, India.
The company's rival, Proctor & Gamble Hygiene & Healthcare, will be declaring its results on 6 February, 2016.