HUL Q1 profit rises 5.6% to ₹2,756 cr, beats estimates on volume growth

HUL Q1 profit rises 5.6% to ₹2,756 cr, beats estimates on volume growth

Hindustan Unilever Ltd (HUL) reported a 5.6 per cent year-on-year (Y-o-Y) rise in consolidated net profit for the April–June quarter of 2025-26 (Q1FY26), beating analysts’ expectations. Both rural and urban demand showed signs of improvement, and volume growth rebounded to 4 per cent after three quarters. 

India’s largest fast-moving consumer goods (FMCG) company posted consolidated net profit of ₹2,756 crore in Q1, topping Bloomberg’s consensus estimate of ₹2,608 crore. Revenue rose 5.1 per cent Y-o-Y to ₹16,514 crore, beating the street estimate of ₹16,076 crore. Sequentially, HUL revenue was up 5.4 per cent, and its net profit expanded 11.9 per cent. 

 

“We can start to see in market trends, our rural growths that had lagged initially are back to growing every quarter, and they have gradually recovered and are sustaining,” said Rohit Jawa, chief executive officer and managing director of HUL, at a press conference following the earnings release. Jawa concluded his 37-year career with Unilever, passing the HUL’s leadership to Priya Nair.

 

While rural markets led the recovery, Jawa noted that urban demand, though still lagging, has started to improve, driven largely by consumption in smaller cities and towns. 

The company said part of the year-on-year profit increase was due to a one-time tax gain resulting from a re-estimation of provisions tied to the potential disallowance of certain prior-year expenses. 

Commenting on macroeconomic conditions, Jawa said there are “three thirds of the economy”.  The top one third by value is the formal urban, followed by the informal urban and then the informal rural.   

“We see that the informal rural and the informal urban sectors are resilient and are getting better. That part is very important for HUL because we serve every Indian,” he said.  “Our products are accessible to all. That is therefore good for our category and also good for consumption at large, because that's the large population, the rural consumers and the urban informal consumers.”

Jawa acknowledged that the salaried class has been under pressure but sees gradual improvement in urban demand. “It’s moving in the right direction,” he said, adding that recent government initiatives, a favourable monetary policy stance, lower food inflation, and good monsoons provide a supportive backdrop for consumption growth. 

Ritesh Tiwari, executive director, finance & IT, and chief financial officer, said the company expects the first half of FY26 to outperform the second half of the previous financial year. 

HUL’s profit before interest, depreciation, and tax (PBIDT) declined 4.0 per cent in the quarter under review to ₹3,791 crore.

“Commodities continue to display divergent trends year-on-year. However, on a sequential basis, we are beginning to observe signs of softening across key materials,” Tiwari said. He noted that HUL has increased investments across several areas of the profit and loss statement, resulting in an Ebitda (earnings before interest, taxes, depreciation, and amortisation) margin of 22.8 per cent. This, he said, has contributed to broad-based and competitive growth, as well as steady gains in turnover-weighted market share. 

The company continues to reshape its product portfolio to align with higher-growth segments. “This is evidenced by a significant circa 500 basis points shift towards the future core and market maker segment in the past two years,” Tiwari said. “As a result, our growth trajectory has steadily improved. In the moderating consumption environment, we have delivered mid-single-digit absolute volume growth in the last five quarters.” 

Tiwari added that market share gains have been driven by a focus on future-oriented channels and stronger performance in key categories such as laundry, skin cleansing, and hair care. 

Jawa said HUL is also ramping up its digital marketing efforts, now allocating more than half of its media spend to digital platforms, with half of that going toward social media. “We're just going where the consumers are going,” he said.