BENGALURU/CHENNAI, April 24 (Reuters) - Hindustan Unilever (HLL.NS) New Tab, opens new tab, the Indian arm of UK's Unilever (ULVR.L) New Tab, opens new tab, posted a bigger-than-expected fall in fourth-quarter profit on Wednesday, as consumers cut back on spending amid sticky food inflation, while stiff competition hurt demand.

Branded consumer goods giants face greater competition from regional rivals, as smaller manufacturers are now better-equipped to compete for shelf space due to easing commodity prices, including of wheat and sugar.

Consumer companies have also seen muted volume growth over the last 12 months due in part to sluggish rural demand and persistently high inflation.

Hindustan Unilever said its profit fell to 24.06 billion rupees ($288.9 million) in the three months ended March 31, from 25.52 billion rupees a year earlier. Analysts, on average, had expected profit of 24.44 billion rupees, according to data from LSEG.

Its sales rose only marginally to 146.93 billion rupees in the fourth quarter, with revenue in a key segment of beauty and personal care declining 2.7% amid price cuts.

Product prices across its portfolio could decline in the low-single digit percentage range in the near-term, the company said, after having already cut prices of its skin cleansing and home care products.

Still, Hindustan Unilever is optimistic that better monsoon showers and improving macroeconomic indicators would help drive demand in the mid-term.

The company's homecare segment, its biggest one, which houses brands like Surf Excel and Comfort, posted mid-single-digit percentage volume growth led by outperformance in Vim liquid.

The consumer goods giant approved a final dividend of 24 rupees per share for the financial year 2024.

Its shares closed 0.1% lower before its results. They declined 15% in the March quarter, against the roughly 5% drop in the Nifty fast-moving consumer goods index (.NIFTYFMCG) New Tab, opens new tab.

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https://www.reuters.com/business/retail-consumer/unilevers-india-arm-q4-profit-falls-more-than-estimates-inflation-competition-2024-04-24/