Unilever's India unit falls as royalty fee rise overshadows profit beat

Shares of Hindustan Unilever (HUL) fell as much as 4.3% on Friday, as a deal to pay its UK parent higher royalty fees took the shine off a bigger-than-expected rise in quarterly profit

CHENNAI (Reuters) - Shares of Hindustan Unilever (HUL), which sells Dove soap and Close-up toothpaste in India, fell as much as 4.3% on Friday, as a deal to pay its UK parent higher royalty fees took the shine off a bigger-than-expected rise in quarterly profit.

The Indian consumer goods major also said the royalty and central services fees it pays UK-based Unilever, which has a roughly 62% stake in HUL, would increase to 3.45% of turnover over the next three years, from 2.65% currently.

Total quarterly profit for the company climbed nearly 12% to 25.05 billion Indian rupees ($308.38 million) for the December quarter, HUL said in an exchange filing after markets closed on Thursday. Analysts polled by Refinitiv had expected 24.76 billion rupees.

($1 = 81.2300 Indian rupees)

 

(Reporting by Praveen Paramasivam in Chennai; Editing by Nivedita Bhattacharjee)