Hindustan Unilever sees fall in sales volumes

MUMBAI, Jan 19 (Reuters): Hindustan Unilever Ltd, the Indian unit of Anglo-Dutch consumer group Unilever Plc , saw weaker than expected growth in quarterly sales volumes as urban shoppers avoided making big purchases, dragging its shares down more than 5.0 per cent.
For the quarter ended December 31, the maker of products such as Dove soap, Sunsilk shampoo and Lipton tea, posted a 3.0 per cent rise in volumes, while analysts, on average, were expecting to see a rise of about 6.0 per cent.
Hindustan Unilever makes about 60 per cent of its sales from urban consumers. During the quarter, rural shoppers bought more than their city counterparts, but those purchases were mostly in low-priced small packs and sachets, chief financial officer PB Balaji told reporters.
The company, Asia's largest consumer goods maker by market capitalisation, has been hurt in the last few quarters by weaker consumer demand in Asia's third-largest economy that grew less than 5.0 per cent in the past two fiscal years.
The weak volumes are likely to reflect on parent Unilever, which makes more than half of its sales from emerging markets. Unilever is set to announce its results on Jan. 20.
Balaji said Hindustan Unilever had started bringing down sticker prices on some of its products as it passed on the benefits of lower material costs like oil, in a bid to boost volumes.
"We had to stop sales for a few days as we cleared the pipeline to get the fresh prices in stores. Without that, we expect volumes would have been in the range of what was expected," Balaji said.