The financial results for the quarter have been prepared in compliance with the Indian Accounting Standards (Ind AS). In addition, ‘Income from operations’ has been reported inclusive of excise duty in accordance with a recent SEBI circular.
During the quarter, in a challenging context where market growth continued to be under pressure, our Domestic Consumer business grew at 2% and EBITDA margin expanded by 60 bps. Profit after tax before exceptional items, PAT (bei), grew by 9% to Rs.1082 Crores.
Home Care: Robust growth with continued momentum on premium laundry
In Fabric Wash, growth was driven by the premium segment as Surf maintained its strong volume-led growth. In Household Care, Vim liquid did well on the back of sustained market development. The Water business continued to do well.
Personal Care: Slowing markets and Personal Wash volumes impact growth
In Personal Wash, the performance was impacted by price increases taken during the quarter. Skin Care growth was driven by the BB and CC creams. Hair Care growth was led by the premium brands Dove and TRESemmé. The recently acquired Indulekha brand continued to perform well and was extended to 4 new states in the quarter. In Oral Care, the overall performance was subdued, though Pepsodent started recovering post relaunch. Lakme Colour Cosmetics sustained its broad based innovation led growth. In Deodorants, Axe Signature continued to gain ground during the quarter.
Refreshment: Strong growth led by Tea
In Tea, all key brands grew well driven by focused in-market initiatives. Lipton Green Tea and the Natural Care portfolio registered another quarter of high growth on sustained market development. In Coffee, Bru Gold continued to lead premiumisation and performed well. In Ice Cream & Frozen Desserts, Magnum Minis were launched during the quarter.
Foods: Modest growth in a challenging market
The focus continues to be on market development for the category. Kissan range of premium Jams gained further traction with consumers and Instant Soups led the growth for Knorr.
Margin improvement sustained
Cost of Goods Sold was higher by 10 bps due to rising input costs. Brand investments were maintained at competitive levels across segments. Earnings before interest, tax, depreciation and amortisation (EBITDA) grew by 5% and EBITDA margin improved by 60 bps. Net Profit at Rs.1096 Crores, was up 12% for the quarter.
The Board of Directors have declared an interim dividend of Rs 7 per equity share of face value of Re. 1 each for the year ending 31st March 2017.
Harish Manwani, Chairman commented: “In challenging market conditions, we delivered another quarter of profitable growth. We remain focused on market development, consumer led innovations and an even sharper drive on operating efficiencies. With a good monsoon, we expect a gradual improvement in market demand and remain positive on the mid-long term outlook for the industry. Our strategic agenda of delivering Consistent, Competitive, Profitable and Responsible growth remains unchanged.”