HUL July-September Profit Up 3% On Year; Volume Growth Flat, Margins Narrow

Hindustan Unilever Ltd. reported flat underlying volume growth for the September quarter, compared with a 3% rise a year earlier and 4% in the June quarter. Underlying sales grew 2% year-on-year, lower than 3% in the same quarter last year and 5% in the previous quarter.

Net profit rose 3% on year to ₹26.9 billion, helped by a one-time income of ₹1.84 billion. Revenue from operations inched up 0.5% to ₹155.9 billion. Earnings before interest, tax, depreciation, and amortisation fell 2.3% to ₹35.6 billion as advertisement and promotion spends rose 4.3% to ₹15.3 billion. EBITDA margin slipped to 23.1% from 23.8% a year earlier. On a consolidated basis, the EBITDA margin contracted 90 basis points to 23.2%, while the gross margin was 50.9%, down 10 basis points.

The company said advertisement and promotion expenses formed 10.3% of sales turnover, 80 basis points higher than last year.

Segment performance
Home care: Revenue fell to ₹56.6 billion from ₹57.4 billion a year earlier. Underlying volume rose in mid-single digits, while sales growth was flat due to price cuts. Segment margin stood unchanged at 19%.

Beauty and Wellbeing: Revenue rose slightly to ₹33.9 billion from ₹33.2 billion, with flat volumes and 5% sales growth. Segment margin declined to 28% from 34%.

Foods and Refreshment: Revenue grew to ₹38.7 billion from ₹38 billion, aided by strong beverages demand. Volume rose in low single digits, with 3% sales growth. Segment margin narrowed to 16% from 18%.

Personal Care: Revenue inched up to ₹24.3 billion from ₹24.1 billion. Underlying volume fell in high single digits, while sales growth was flat. The hair care business maintained market leadership, though turnover was hit by GST rate changes.

HUL said its quarterly performance reflected a temporary impact from GST changes and prolonged monsoon conditions in some regions. The profit rise was partly due to a one-off gain from the resolution of past tax matters between UK and Indian authorities.

The company expects normal trading conditions from early November once GST-related disruptions ease. It is guided for stable EBITDA margins and low single-digit price growth if commodity prices remain steady.

For the first half of 2025-2026, net profit rose 5.3% to ₹54.2 billion and revenue increased 2.2% to ₹315.2 billion. The board declared an interim dividend of ₹19 per share, with November 7 as the record date.