Country’s largest consumer goods maker Hindustan Unilever (HUL) on Thursday reported a rise in fourth-quarter profit (Q4FY25), meeting analysts’ estimates. However, margins contracted due to inflation in key commodities such as palm oil, tea, and coffee. HUL’s standalone net profit increased by 3.6% year-on-year to Rs 2,493 crore in Q4, aligning with Bloomberg’s consensus estimate of Rs 2,482 crore.
Urban demand remained muted in Q4, while rural demand showed resilience, consistent with market research insights from Nielsen and Kantar for the quarter. HUL derives 60% of its revenue from urban areas and 40% from rural markets.
The company, however, expects a gradual recovery in urban consumption, supported by fiscal stimulus measures announced in the Union Budget earlier this year. It added that the first half of FY26 is likely to outperform the second half of FY25. HUL’s Q4 revenue rose 2.4% year-on-year to ₹15,214 crore, aligning with Bloomberg’s consensus forecast of ₹15,200 crore.
“We have seen urban markets moderating and rural markets gradually recovering. Both should improve over the next three to six months of FY26. The macros are favourable and it is a good moment for the FMCG (fast-moving consumer goods) market,” Rohit Jawa, CEO & MD, Hindustan Unilever (HUL), said in a post-results briefing on Thursday.
The maker of Lux soaps and Rin detergent powders reported a sequential volume growth of 2% in the fourth quarter (Q4). While this is at the lower end of the 2–4% range seen in FY25, it marks an improvement over the flat volume growth recorded in the December quarter (Q3). In Q1 and Q2 of FY25, HUL’s volume growth was 4% and 3%, respectively.
HUL’s turnover also surpassed Rs 60,000 crore for the full fiscal year ending 2025, with underlying volume growth at 2%. Shares of the company fell 4% on Thursday on the BSE at the end of trade to Rs 2,325.25 apiece despite the company announcing that it had proposed a final dividend of Rs 24 per share for FY25, subject to shareholder approval. Together with the interim dividend of Rs 19 per share and a special dividend of Rs 10 per share declared in October 2024, the total dividend payout for FY25 will be Rs 12,453 crore.
Earnings before interest, tax, depreciation and amortisation (Ebitda) rose nearly 1% year-on-year to Rs 3,466 crore. Bloomberg consensus estimates had pegged Ebitda at Rs 3,490 crore. Ebitda margins contracted to 22.8% versus 23.1% reported last year as inflation in palm oil, tea and coffee hurt the FMCG major despite taking price hikes in categories such as soaps and beverages. Bloomberg consensus estimates had pegged Ebitda margins at 22.4% in Q4 for HUL.
In the near term, HUL expects price growth to be in the low-single-digit range if commodities remain where they are, the company’s CFO Ritesh Tiwari said on Thursday. Tiwari said that the company has lowered its operating margin guidance to 22-23% compared with the previous guidance of 23-34% on the back of higher investments in advertising and high-growth demand spaces. Furthermore, HUL’s gross margin is also expected to moderate as it continues to deliver the right price-value proposition, sector analysts said.
Among segments, homecare grew 1.8% to Rs 5,818 crore, with mid-single volume growth. Beauty and wellbeing was up 4.2% to Rs 3,113 crore, with volumes growing in low single-digit. Personal care was up 2.9% to Rs 2,124 crore, volumes saw low-single digit decline in the segment. Foods fell 0.3% to Rs 3,896 crore, volumes saw mid-single digit decline. Others (includes exports, consignment, etc.) were up 45.3% to Rs 263 crore.
Within foods, the HUL management said that tea delivered low-single-digit growth driven by pricing, while nutrition drinks’ turnover was impacted by continued category headwinds and the transitionary impact of pack-price architecture change. Ice creams delivered double-digit volume-led growth. The home care segment witnessed negative price growth on account of pricing actions taken to pass on commodity-led benefits to consumers. The liquids portfolio in fabric wash and household care continued to grow in double digits, driven by expansion into new formats and segments. Other segments like skin cleansing and oral care were hurt due to price hikes.