HUL Q2FY26 volume growth flat amid GST transition; profit rises 3.6%

Hindustan Unilever (HUL), one of India’s largest fast-moving consumer goods (FMCG) companies, reported a 3.6 per cent rise in its net profit in the second quarter (July-September) of 2025-26 (Q2FY26) primarily driven by a one-off positive impact following the resolution of prior years’ tax matters between the UK and Indian tax authorities. 

The underlying volume growth was flat for Q2FY26 as the quarter witnessed a transition to the new goods and services tax (GST) rates, which affected 40 per cent of HUL’s portfolio. 

The Indian unit of UK's Unilever, home to brands such as Pears bath soap and Surf Excel detergent, saw its net profit (attributable to the owners of the company) at ₹2,685 crore for Q2FY26. The FMCG major’s revenue rose by 2 per cent year-on-year (Y-o-Y) to ₹16,241 crore. Bloomberg analysts estimated revenue at ₹16,030.5 crore and net profit at ₹2,561.5 crore.

 

The company’s profit before interest, taxes, depreciation, and amortisation was up 1.7 per cent at ₹4,057.0 crore. 

Priya Nair, at her first quarterly earnings conference after taking over as HUL’s managing director and chief executive officer (MD&CEO), said the company’s focus now will be on volume-led revenue growth. 

She also pointed out four areas of priority at HUL.

 

They focus areas were: to radically segment consumers; modernise and transform core brands; ensure its marketing and sales force keeps transforming and making them future-fit so that brands have a high discovery online and in future-fit channels; and to invest in and scale high-growth spaces.

 

Talking about demand witnessed in the quarter, Ritesh Tiwari, executive director-finance & information technology (IT), and chief financial officer (CFO) at HUL, said that at a MAT (moving annual total) level, demand growth trends remain stable across urban and rural.

 

On the short-term impact of GST transition witnessed in the quarter, Tiwari said: “These (GST rate) changes led to transitory disruption across channels as trade partners postponed orders to clear existing inventories. Additionally, consumers delayed pantry replenishment in expectation of lower sales prices. These factors, coupled with pricing volatility arising from multiple prices in the market, resulted in a short-term impact on sales during the quarter.” He, however, said that the company expects the GTS transition to normalise from November onwards.

 

Talking about the long-term impact of GST 2.0, Tiwari said these reforms are expected to enhance affordability, boost disposable income, uplift consumer sentiment, and unlock opportunities for premiumisation across categories.

 

Moving forward, with commodity prices remaining stable, the company expects low single-digit price growth, and anticipates the second half of the financial year (H2FY26) to be better than the first half.

 

“Our Ebitda (earnings before interest, taxes, depreciation, and amortisation) margin for the upcoming quarter is expected to remain in the similar range, excluding ice cream business,” Tiwari said.

 

He also said that the company’s gross margin has sequentially increased 130 basis points (bps) and savings have been invested back into all lines in the profit-and-loss (PnL) account. “Our strategy is to invest across all different lines of the PnL to ensure that focus always remains on one single objective, which is competitive volume growth,” he said.

 

Talking about the evolving consumer basket, Nair said: “We will keep looking at all four opportunities, growing our existing brands, bringing new Unilever brands, launching some new brands, and acquisition.”

 

The CEO of Unilever, the parent company of HUL, Fernando Fernandez said on the firm's investor call after its results: “(In) India, quick commerce is accelerating. Our quick commerce business in India is more than doubling this year. We believe that our portfolio is well suited.”

 

He further said: “India in particular is very well-positioned over the medium term. The GST reform has had some impact in the short term, but I believe it's very good news as 40 per cent of our portfolio has close to 10 per cent reduction, which will boost demand in the medium term.”