FMCG conglomerate Hindustan Unilever (HUL) saw a nearly 3 percent drop in its shares on Friday. The company, which announced its results the day before, failed to convince investors.

HUL posted a 6.9 percent increase in its after-tax consolidated profit for the June (Q1) FY23-24 quarter, with a consolidated net profit of Rs 2,556 crore as compared to Rs 2,391 crore in the same quarter of the previous financial year. The company missed the analysts’ estimates for this.

The FMCG company reported a 10 percent year-on-year (year-over-year) revenue growth in its homecare section, appreciating its positive contribution to business performance, as reported by Moneycontrol.

Rohit Jawa, CEO and general manager of HUL, highlighted the challenges of the working environment. He said, “In the near term, the FMCG industry will continue to witness a rebalancing of price-volume growth equations and a gradual recovery in consumer demand. In this environment, we will continue to provide superior value to our consumers and continue to invest in our brands,” as reported by CNBC TV18.

Jawa said the company’s focus will be on their current initiatives such as digitization and sustainability, with the aim of expanding on these in the future.

Also Read: HUL appoints Rohit Jawa next MD and CEO, Sanjiv Mehta to retire

On the other hand, sections such as beauty and personal care, food and beverage held back the company’s growth. While the former delivered a revenue growth of 4 percent, the latter contributed a revenue growth of 5 percent. Ice cream consumption in particular was affected by unusual rainfall.

Analysts at Jefferies noted that HUL’s growth was heavily impacted by local and regional competition, especially in the tea segment, which had previously left the company during peak inflation, as reported by Business Standard.