MUMBAI, July 28 (Reuters) - Hindustan Unilever Ltd (HLL.BO), India's largest consumer goods company, on Tuesday 28 July reported a 2.7 percent fall in net profit for the June quarter, disappointing investors and knocking its shares down from a nine-year high touched earlier in the session.

Dove, a Hindustan Unilever product - www.hul.co.in

HLL's shares, which rose to 306 rupees in intra-day trades, fell to a low of 273.40 rupees before closing at 277 rupees. The stock has risen 10.7 percent so far this year, lagging a 59 percent rise in the main index .

"Being the market leader, the market was expecting more from the company. It has taken a hit in market share in its high-margin segments such as personal care products, soaps and detergents," said Vanmala Nagwekar, research analyst with India Infoline (IIFL.BO).

The company, a unit of Anglo-Dutch firm Unilever Plc (ULVR.L) (UNc.AS), reported a net profit of 5.43 billion rupees ($113 million), down from 5.58 billion a year ago. Net sales rose to 44.76 billion rupees from 41.53 billion.

A Reuters poll of 11 brokerages forecast net profit at 6 billion rupees on net sales of 45.6 billion rupees.

Profits were hit by a mark-to-market charge of 320 million rupees from a restatement of foreign exchange exposure, the company said.

Volume growth was led by the personal products and food categories, Chief Financial Officer R. Sridhar told reporters on a conference call.

However, the high-margin detergents and soap segments, which are the biggest contributors to the company's revenue and profits, and tea suffered as customers opted for cheaper products amid the economic downturn, he said.

The company is re-launching products in some of these categories, Sridhar said, adding that there have also been price changes. The company has either reduced prices or increased "the grammage without changing the price", Sridhar said.

While HLL's strong distribution network gives it an edge over its peers, "the company has come under increasing pressure from smaller rivals, such as Dabur (DABU.BO), Emami (EMAM.BO) and L'Oreal, which have adopted aggressive expansion policies and have consequently eaten into Hindustan Unilever's value share," Euromonitor said in a recent report

Analysts said that Godrej Consumer Products (GOCP.BO) was also eating into HLL's market share in soaps.

The fast-moving-consumer-goods sector, estimated to be valued at more than $17 billion, has been seeing double-digit growth in sales in the last couple of years.

"It is one of the most promising sectors in India," the India Brand Equity Foundation said in its report in May.

Despite the economic recession, the sector will see a 14 percent growth, it said.

Last week, cigarettes, hotels and lifestyle apparel firm ITC Ltd (ITC.BO), which competes with Hindustan Unilever in toiletries and branded foods segment, had reported a forecast-beating 17.4 percent rise in net profit for the June quarter on higher prices for its premium cigarettes.

HLL shares, valued at $13.55 billion, rose 12 percent in the June quarter, lagging a 49 percent rise in the main index but almost in line with an 11 percent rise in the sector index .BSEFMCG. ($1=48.2 rupees) (Reporting by Janaki Krishnan; Editing by Himani Sarkar)