Hindustan Unilever Ltd, India’s largest consumer goods manufacturer, warned on Tuesday that strong inflation will eat into its margins in the current quarter, potentially leading to higher product prices.

In the June quarter, high commodity prices forced Unilever’s India unit to boost prices across its core divisions, including domestic care, skin and hair washing products.

Hindustan Unilever (HUL) expects margins to remain under pressure in the September quarter, with price increases driving growth, the firm announced on Tuesday.

“If commodity prices taper further, then we should start seeing favourable impact in our books from the December quarter,” Chief Financial Officer Ritesh Tiwari said on a post-earnings call.

“We will continue to take calibrated price actions.”

Annual consumer inflation in India, which had reached multi-year highs in recent months, fell slightly to 7.01 per cent in June. more info

During the June quarter, HUL sold products worth 140.16 billion rupees.

Sales of the company’s home care goods, which include names such as Surf Excel and Vim, increased nearly 30% to 49.31 billion rupees, while the beauty and personal care category increased 17 per cent.

According to Refinitiv statistics, HUL’s profit for the three months ended June 30 increased to 22.89 billion rupees ($286.36 million), exceeding analysts’ projections of 21.93 billion rupees.

(Adapted from Business-Standard.com)