Hindustan Unilever Profit Drop on Labour Code Costs

Hindustan Unilever reported a Unilever profit drop in its third quarter results. The company said higher expenses and labour code charges hurt earnings. As a result, profit fell sharply compared with last year.
The Indian unit of the UK-based giant posted a 15% fall in profit. Net profit from continuing operations reached 25.90 billion rupees. Last year, it had reported 30.39 billion rupees for the same period. However, rising costs played a major role in the decline. The company also faced a one time impact from new labour laws. Therefore, overall earnings slipped during the quarter.

Labour Code Impact Across Sectors

The company booked a one-time charge of more than 1 billion rupees. This cost came from India’s new labour codes. These rules mark one of the biggest changes to worker laws in decades. Many companies across sectors have felt the same pressure. For example, firms like Godrej Consumer Products and Wipro also reported similar hits. As a result, profits across industries have come under strain.

New Moves in Health Business

Despite the profit drop, the company is expanding its health portfolio. It plans to buy the remaining 49% stake in Zywie Ventures. The deal is worth 8.24 billion rupees.
This move will strengthen its health and wellbeing segment. In addition, the company wants to focus more on future-ready categories. At the same time, it is exiting a smaller investment. The company will sell its minority stake in Nutritionalab. The sale is valued at 3.07 billion rupees.

Outlook Ahead

The recent Unilever profit drop reflects higher costs and regulatory changes. However, the company continues to invest in growth areas. Therefore, its strategy now focuses on health, wellbeing, and long term expansion.