HUL Q1 FY26 Results: Net Profit Grows 6% to Rs 2,768 Crore Despite Margin Pressure
Consumer goods giant Hindustan Unilever Limited (HUL) delivered solid first-quarter performance for FY2026, reporting consolidated net profit growth of 6% year-on-year to Rs 2,768 crore for the quarter ended June 2025. The earnings improvement was primarily driven by reduced tax expenses and consistent volume-led sales growth across key product categories.
The results reflect HUL's resilient business model and successful execution of its growth strategy despite challenging market conditions and input cost inflation pressures affecting the broader FMCG sector.
Revenue Growth and Volume Performance
Total revenue increased by 5% to Rs 16,323 crore, supported by healthy underlying metrics across the business. The company achieved underlying volume growth (UVG) of 4% and underlying sales growth (USG) of 5%, demonstrating balanced expansion driven by both volume increases and strategic pricing initiatives.
This revenue performance indicates HUL's ability to maintain market share while managing price-sensitive consumer behavior in an inflationary environment. The consistent volume growth across categories reflects strong brand equity and consumer loyalty.
Margin Compression and Investment Strategy
While revenue growth remained robust, profitability metrics faced some pressure due to strategic investments. EBITDA for the quarter stood at Rs 3,718 crore, marginally declining from Rs 3,744 crore in the corresponding period last year.
The EBITDA margin contracted by 130 basis points to 22.8%, aligning with company guidance as HUL continued to increase business investments for long-term growth. This margin compression reflects the company's deliberate strategy to prioritize market expansion and innovation over short-term profitability optimization.
Tax Benefits Support Bottom Line
A significant factor contributing to net profit growth was favorable tax treatment. A one-off re-estimation of tax provisions relating to prior years resulted in lower tax expenses, boosting reported profit after tax by 12%. Without this benefit, profit after tax before exceptional items actually declined 5% to Rs 2,526 crore year-on-year.
Segment-Wise Performance Analysis
HUL's diversified portfolio demonstrated balanced growth across major business segments, with each category contributing to the overall positive performance.
Home Care Segment Resilience
The Home Care division achieved 4% underlying sales growth driven by high-single digit volume expansion, despite facing pricing pressures in competitive markets. Fabric Wash products delivered mid-single digit volume growth, led by the flagship Surf Excel brand's strong market performance.
Household Care posted impressive double-digit volume growth, supported by continued momentum in liquid detergent products, reflecting changing consumer preferences toward premium cleaning solutions.
Beauty & Wellbeing Expansion
The Beauty & Wellbeing segment recorded 7% underlying sales growth with low-single digit volume growth. Hair Care products delivered mid-single digit growth, while Skin Care and Color Cosmetics segments grew in low single digits, indicating steady market penetration despite competitive intensity.
Personal Care achieved 6% growth through calibrated pricing strategies implemented to offset input cost inflation, demonstrating pricing power in essential personal hygiene products.
Foods Category Performance
The Foods segment delivered 5% underlying sales growth alongside mid-single digit volume increases. Tea and coffee products experienced double-digit growth, while Ice Cream achieved high-single digit volume growth despite weather-related challenges during the quarter.
Packaged Foods and Lifestyle Nutrition categories continued strengthening their market positions, reflecting HUL's successful diversification into higher-growth food segments.
Strategic Acquisitions and Integration
During the quarter, HUL completed the integration of Uprising Science Pvt Ltd (USPL), the company behind the popular Minimalist skincare brand. This acquisition, valued at Rs 2,706 crore and completed in April 2025, had its financials included in Q1 results.
The integration represents HUL's strategic focus on expanding its presence in the premium beauty and personal care segment, particularly targeting younger, digitally-native consumers who prefer specialized skincare solutions.
Market Response and Share Performance
Equity markets responded positively to the quarterly results announcement. HUL shares jumped 3.6% to Rs 2,525.2 on the NSE following the earnings release, reflecting investor confidence in the company's strategic direction and execution capabilities.
This positive market reaction indicates that investors view the volume-driven growth and strategic investments favorably, despite the temporary margin compression.
Management Outlook and Future Strategy
CEO and Managing Director Rohit Jawa expressed optimism about market conditions and company positioning. He noted that "FMCG demand has continued to remain stable, with a gradual uptick in recency" and emphasized the company's strategic approach to portfolio transformation.
Jawa highlighted that favorable macroeconomic indicators supported the decision to increase business investments, resulting in competitive, broad-based growth. The management reiterated confidence in the company's ASPIRE strategy, focusing on innovation, digital acceleration, and strengthening presence in future-ready channels.
Innovation and Product Development
HUL launched several new products during the quarter, continuing its emphasis on innovation-driven growth. These launches span across categories and reflect the company's commitment to meeting evolving consumer preferences and market trends.
The company's consistent investment in research and development positions it well for sustained growth as consumer preferences continue evolving toward premium, sustainable, and health-focused products.
Looking ahead, management expects the recovery trend to continue, supported by improving economic conditions and the successful execution of growth strategies across all business segments.
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