Unilever India slips after joining peers in flagging commodity inflation (updated)

Unilever

Wed 04:19

Adds executive comments in paragraph 3 and 8, background in paragraph 12
By Praveen Paramasivam
Oct 28 (Reuters) - India's Hindustan Unilever HLL.NS said it expects commodity prices to stay high, echoing Nestle India's comments NEST.NS, after reporting a 6% rise in quarterly profit on healthy demand for beauty and home care goods.
From Procter & Gamble PG.N to Dettol maker Reckitt RKT.L, consumer goods makers globally are raising prices to deal with mounting costs as war-related supply chain disruptions drag on.
"In the evolving input cost environment, we took calibrated price increases," CFO Niranjan Gupta said on a media call on Wednesday. 
"Commodity inflation is expected to remain elevated in the short term." 
Shares in the Indian arm of the UK's Unilever ULVR.L, which have lost a fifth of their value this year, fell 3%.
"The market has undoubtedly reacted to the margin pressures being seen across the portfolio," said Akshay D'Souza, an independent consumer goods consultant, referring to a 140-basis-point contraction in margin.
Expenses jumped 16% in the quarter ended September 30.
"We will continue to take pricing ... depending on how costs come in," said CEO and Managing Director Priya Nair, adding that Hindustan Unilever will still prioritize volume growth.
Previous price increases and healthy demand for everything from Vim dishwash and Surf Excel detergent to hair care, cosmetics and skin care pushed sales 15% higher at 173.99 billion rupees.
Volume increased 7%, while profit stood at 28.44 billion rupees ($299.01 million).
The Vaseline moisturizer maker also forecasted an improvement in fiscal 2027 results from fiscal 2026, when volume climbed 4% and profit after tax was flat, betting on resilient demand and wider distribution.

        The results come as India pursues an unprecedented food safety crackdown, including proposed warning labels for foods.
Hindustan Unilever said it welcomed transparency in food labelling and would comply with regulations.
UK's Unilever nudged up its annual volume growth forecast on strong demand in emerging markets and price increases after its third-quarter underlying sales beat expectations.

($1 = 95.1150 Indian rupees)

 (Reporting by Praveen Paramasivam in Chennai; Editing by Sonia Cheema and Ronojoy Mazumdar)
 ((Praveen.Paramasivam@thomsonreuters.com; +91 867-525-3569;))