Hindustan Unilever fell 2.61% to 2,581 rupees after the company’s board approved a proposal for a new arrangement under which it will now pay Unilever Group royalties and central services at 3.45% of turnover, higher than the previous trading day. 2.65% for the current financial year. This increase will be effected over three years, the company said.

In 2013, HUL arranged with Unilever to pay 2.65% royalty and central services fees for 10 years.

Under the new agreement, royalty and service charges will increase by 45 basis points from February 2023 to December 2023, 25 basis points from January to December 2024 and 10 basis points from January 2025 base points. On a standalone basis, FMCG major’s net profit rose 16% to Rs 14,986 crore in the October-December quarter of FY23 vs the October-December quarter of FY22, up 12% to Rs 2,505 crore.

HUL is the largest fast-moving consumer goods company, which delivered underlying volume growth of 5%. During the last quarter, the EBITDA margin at 23.6% improved by 30 bps versus SQ’22 and declined 180 bps YoY. PAT (bei) was up 13% YoY, and PAT at Rs 2,505 crores was up 12% YoY.