Shares of Hindustan Unilever were dropping on Thursday after the fast-moving consumer goods major posted disappointing fourth-quarter results amid tepid rural demand for its products.

What Happened: Hindustan Unilever reported a 6% decline in standalone net profit for the fiscal fourth quarter to ₹2,406 crore, down from ₹2,552 crore a year ago and lower than the ₹2,450 crore that analysts had anticipated on average.

The company’s sales saw a marginal 1% increase to ₹14,693 crore in the fourth quarter. Notably, revenue from the beauty and personal care segment dropped by 2.7%.

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HUL announced a final dividend of ₹24 per share for FY24 on equity shares with a face value of ₹1. Earlier, the company had distributed an interim dividend of ₹18 per share on November 16, 2023. Thus, the total dividend for FY24 stands at ₹42 per equity share.

“Our focus remains on enhancing operational excellence, rebuilding gross margins, and amplifying investments in brands and long-term capabilities,” said Rohit Jawa, CEO and managing director, “Looking ahead, I’m optimistic about an improvement in consumer demand, supported by normal monsoons and favorable macroeconomic indicators.”

“Given the rising affluence, untapped FMCG consumption, and robust digital infrastructure in India, I am highly confident about the medium to long-term prospects of the Indian FMCG sector,” Jawa added.

The company’s homecare segment, its largest, which includes brands like Surf Excel and Comfort, reported mid-single-digit volume growth, driven by strong performance in Vim liquid.

On Thursday, Hindustan Unilever re-named its “health food drinks” category as functional nutritional drinks (FND) after the Ministry of Commerce and Industry asked e-commerce websites to remove drinks and beverages from “heathy drinks” category on their platforms.

Price Action: Hindustan Unilever’s share price tumbled 1.72% to ₹2,221.45 in early trade on Thursday

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