Newsletter
Hindustan Unilever shares fell as much as 6% intraday after the FMCG giant reported Q1 results that missed expectations, particularly on volume growth.
By the numbers:
- Net profit: down 3% YoY to ₹2,673 crore vs ₹2,756 crore
- Revenue: up 10% YoY to ₹17,341 crore vs ₹15,757 crore
- EBITDA: up 8.4% YoY to ₹3,947 crore vs ₹3,640 crore
- EBITDA margin: remained flat at 23%
The why: the quarter remained challenging as volatile crude oil prices, driven by the ongoing US-Iran conflict, kept input costs elevated. Net profit also declined due to the absence of the one-off tax credit recognised in the year-ago quarter.
HUL's Personal care business posted 4% underlying sales growth (USG), supported by price hikes taken to offset a second consecutive year of palm oil inflation.
There were some bright spots.
The Beauty & Wellbeing segment recorded 11% underlying sales growth to ₹3,721 crore, driven by strong volume growth. Hair Care also delivered double-digit underlying sales growth, led by premium products and newer formats.
Management's take: despite the inflationary environment, HUL is confident of maintaining its EBITDA margin guidance.
It expects inflation to remain in the 3-5% range in the coming quarter and plans to take calibrated price hikes to protect margins without hurting demand. The company also expects the monsoon and inflation to keep the next quarter volatile.
MD & CEO Priya Nair said demand is gradually stabilising, with volumes improving, and reiterated that HUL's focus remains on volume-led growth.
She also highlighted five consecutive quarters of strong growth in the lifestyle nutrition business, driven by Horlicks Superfoods, Boost crossing the ₹1,000 crore revenue milestone, and the launch of Horlicks Protein.
Despite rising input costs, the company plans only measured price increases to protect consumers while sustaining long-term growth.
