Feb 12 (Reuters) - Hindustan Unilever reported a 15% decline in quarterly profit on Thursday, pressured by thinner margins as the consumer goods major cut some product prices to counter rising competition, sending shares lower.
The local subsidiary of UK's Unilever, home to Dove and Surf Excel brands, said its profit from continuing operations fell to 25.90 billion rupees ($286.05 million) for the quarter ended December 31.
Shares fell as much as 4.6% after the results.
Total expenses climbed 5%, with EBITDA margins shrinking by 70 basis points from a year earlier to 23.3%, after Hindustan Unilever cut prices in its tea business and home care portfolios, partly to stave off competition.
Hindustan Unilever has grappled with stiff competition in fabric care from startups as well as Ariel detergent maker Procter & Gamble and India's Godrej Consumer Products.
Three analysts said Hindustan Unilever's margins missed their estimates. Akshay D'Souza, an independent consumer goods consultant, said the company's focus on distribution-led growth, a slower pace of launches and acquisition spending have squeezed margins.
However, its sales growth improved, rising 4% from a year earlier to 156.14 billion rupees. A 4% increase in sales volume growth is "a bright spot," said Ajay Thakur, research analyst at Anand Rathi Institutional Equities.
Consumer goods makers, including Britannia Industries and Hindustan Unilever, expect demand to pick up after several subdued quarters, supported by tax cuts and easing inflation that have bolstered urban spending.
Hindustan Unilever expects the fiscal year starting April to be better than the current year. But its parent firm expects 2026 sales growth to be at the lower end of its forecast after a slowdown in the U.S. and Europe.
Hindustan Unilever on Thursday also said it would buy the remaining 49% stake in plant-based food brand Oziva for 8.24 billion rupees.
($1 = 90.5450 Indian rupees)
Reporting by Komal Salecha in Bengaluru and Praveen Paramasivam in Chennai; Editing by Sonia Cheema
Source: Reuters