Oct 23 Reuters Hindustan Unilever, the Indian unit of UK39;s Unilever, reported a smallerthanexpected quarterly profit on Wednesday as the consumer goods maker incurred higher expenses amid a slowdown in urban markets.

The Dove soapmaker reported a near4 fall in profit to 26.12 billion rupees 310.8 million for the second quarter ended Sept. 30, missing analysts39; estimates of 26.88 billion rupees, according to data compiled by LSEG.

When overall market demand signals are muted, we are seeing urban growth in the market moderating, CFO Ritesh Tiwari told reporters. Now this impacts all the categories at Hindustan Unilever.

Rural demand has gathered pace over the last three quarters, including the JulySeptember period, overtaking growth in urban pockets, which accounts for twothirds of Hindustan Unilever39;s revenue.

However, Tiwari said the longerterm prospects for consumer goods makers in India is bright, adding Hindustan Unilever will double down and invest more in the world39;s most populous country. He did not provide details.

For the reported quarter, expenses rose 3 to 122.65 billion rupees due to higher tea and crude oil prices, weighing on the bottomline.

Still, sales volumes grew 3, helped by an increase in rural spending, which led to a 2 rise in revenue to 153.19 billion rupees.

The company39;s shares, which have been largely flat this year, closed nearly 1 lower before the results.

Among peers, Nestle India reported a drop in profit on higher…