Hindustan Unilever Reports Q2 Profit Rise of 3.9% as Price Hikes Offset Input Costs

Hindustan Unilever (HUL) has reported a 3.9 per cent year-on-year increase in its consolidated net profit attributable to shareholders, reaching ₹2,790 crore for the September quarter. Consolidated revenue from operations grew 14.5 per cent to ₹18,226 crore during the same period, driven by calibrated price increases, resilient consumer demand, and cost savings that cushioned inflationary pressures despite narrowing margins.

On a standalone basis, net profit rose 2 per cent to ₹2,844 crore, while turnover grew 15.2 per cent to ₹17,399 crore. Earnings before interest, tax, depreciation, and amortization (EBITDA) increased 8 per cent to ₹4,089 crore. However, EBITDA margins narrowed from 24 per cent to 22.6 per cent. Profit after tax before exceptional items grew 9 per cent, though reported profit growth was affected by a one-off ₹273-crore tax-related gain recorded in the corresponding quarter of the previous year.

Underlying sales growth reached 15 per cent, marking the highest in 14 quarters, with underlying volume growth standing at 7 per cent. Price increases of around 7.5 per cent helped the company offset higher input costs without derailing consumer demand.

“The focus is to ensure that we do the right amount of pricing to cover costs, go behind savings, whether in procurement and supply chain efficiencies overall, so that we have the right balance between volume and price,” said CEO and MD Priya Nair during a post-results media interaction.

During the quarter, HUL added 30,000 stores. CFO Niranjan Gupta noted that pricing was calibrated specifically to recover absolute cost increases rather than to preserve percentage margins. Advertising and promotion expenditure declined by 9.3 per cent to ₹1,481 crore, reflecting procurement and advertising efficiencies.

Segment-wise, home-care revenue rose 21.4 per cent to ₹6,878 crore, although the segment’s profit increased by only 2.6 per cent to ₹1,111 crore. Management stated that home care achieved roughly 10 per cent volume growth despite price increases of approximately 10 per cent. This divergence highlighted ongoing pressure from raw materials in the home-care segment, where price adjustments lagged behind input cost increases. Meanwhile, beauty and well-being delivered double-digit volume growth, while personal-care volumes remained flat. Personal-care segment profit fell 8.7 per cent to ₹449 crore.

According to Nair, urban and rural demand remained positive, with rural demand showing sequential improvement. HUL expects commodity inflation to remain elevated moving forward but has retained its medium-term EBITDA margin guidance of 22 to 24 per cent. Additionally, the board declared an interim dividend of ₹19 per share.

"Hindustan Unilever's latest performance demonstrates the importance of balancing calibrated price adjustments with supply chain efficiencies during periods of commodity inflation. By focusing on recovering absolute cost increases rather than aggressively protecting percentage margins, legacy consumer goods companies can sustain volume growth and protect market reach. For emerging brands and consumer startups, this highlights the necessity of maintaining operational agility, keeping a close check on procurement costs, and protecting demand resilience when input pressures rise." — Dr. Shishir Gupta, Founder & CEO, StartupLanes