HUL Q1 profit slips 2 per cent despite double digit sales growth

MUMBAI: The tills kept ringing, but the bottom line wasn’t quite humming along. Hindustan Unilever Ltd (HUL) reported a 2 per cent decline in consolidated net profit for the quarter ended 30 June 2026, as a one-off tax benefit in the year-ago period masked another quarter of healthy sales growth and resilient operating performance.

The FMCG major posted a profit after tax of Rs 2,680 crore, compared with Rs 2,741 crore in the corresponding quarter last year. Excluding exceptional items, however, profit after tax rose 9 per cent to Rs 2,731 crore, reflecting steady underlying business momentum.

Total sales for the quarter increased 10 per cent to Rs 17,184 crore, while revenue from operations rose to Rs 17,149 crore from Rs 15,552 crore a year earlier. Including other income of Rs 35 crore, total income stood at Rs 17,529 crore, compared with Rs 15,958 crore in the year-ago quarter.

The company reported earnings before interest, tax, depreciation and amortisation (EBITDA) of Rs 3,947 crore, up 8 per cent from Rs 3,640 crore a year ago. However, the EBITDA margin narrowed by 40 basis points to 23.0 per cent, indicating continued cost pressures despite higher sales.

Profit before exceptional items and tax rose 9 per cent to Rs 3,707 crore, compared with Rs 3,393 crore in the corresponding quarter last year.

During the quarter, HUL booked exceptional charges of Rs 75 crore, primarily comprising restructuring expenses of Rs 115 crore, partly offset by a Rs 45 crore gain from the disposal of surplus assets and lower acquisition and disposal-related costs.

Total expenses increased to Rs 13,822 crore from Rs 12,565 crore a year earlier, reflecting higher input costs and increased investments behind brands.

Among the major expense heads, cost of materials consumed rose to Rs 5,429 crore from Rs 5,264 crore, while purchases of stock-in-trade increased sharply to Rs 3,321 crore from Rs 2,738 crore. Employee benefit expenses stood at Rs 769 crore, compared with Rs 689 crore in the corresponding quarter last year.

The company also stepped up investments in brands, with advertising and promotion expenditure rising to Rs 1,657 crore from Rs 1,598 crore, while other expenses increased to Rs 2,215 crore from Rs 2,001 crore.

Across business segments, Home Care remained the largest contributor with revenue of Rs 6,554 crore, followed by Beauty & Wellbeing at Rs 4,083 crore, Foods at Rs 3,480 crore, Personal Care at Rs 2,624 crore, and Others, including exports, at Rs 600 crore.

Total comprehensive income for the quarter stood at Rs 2,768 crore, compared with Rs 2,746 crore a year earlier, supported by gains from other comprehensive income.

The June quarter underlines a familiar theme for India’s largest FMCG company: demand remains resilient and sales continue to grow at a healthy clip, but profitability is being shaped by higher investments and a less favourable comparison with last year’s tax gains. With double-digit revenue growth, expanding brand investments and steady operating performance, HUL appears focused on protecting long-term market share even as margins face near-term pressure.