In an attempt to regain lost market share, FMCG major Hindustan Unilever (HUL) is said to have gone in for an advertising blitz in the September quarter. This, according to industry analysts, is expected to hurt its profitability.
Analysts said HUL’s expenditure on advertising and sales promotion (A&P) in the September quarter of the current fiscal is expected to be higher by around 40% over last year’s corresponding quarter. HUL is slated to announce its September quarter performance on Saturday, October 31.
The company is projected to have upped its A&P spend to around Rs 570 crore during the just ended quarter, while the same was Rs 404 crore during the September quarter of 2008. Analysts expect this spurt in ad spend to translate into a 250-basis-point hit on margins.