MUMBAI: Hindustan Unilever Limited (HUL) reported a 4 percent year-on-year rise in consolidated net profit to Rs 2,694 crore for the second quarter of FY26, aided by a one-time tax resolution benefit. The company’s revenue from operations grew 2 percent to Rs 16,241 crore, reflecting muted consumer demand and subdued volume growth during the quarter ended September 30, 2025.
According to the company, the profit growth was supported by a “one-off positive impact” arising from the resolution of historical tax matters between Indian and UK tax authorities. Excluding this benefit, core earnings performance remained largely steady. Operating margins, however, came under pressure—EBITDA margin fell 90 basis points year-on-year to 23.2 percent.
HUL reported flat underlying volume growth, signalling continued demand sluggishness across key categories. Management attributed this to transitory factors such as GST-related market adjustments and a prolonged monsoon that affected rural consumption and distribution. The company expects conditions to stabilise by early November.
Despite modest topline growth, HUL maintained its leadership in India’s fast-moving consumer goods (FMCG) sector, supported by a broad product portfolio and a strong distribution network. The company also reiterated its strategic focus on modernising core brands, accelerating digital channels, and expanding in high-growth segments such as health, wellbeing, and premium products.
Chief Executive Officer Priya Nair said in a statement on Thursday that the company remains committed to “transforming the portfolio to serve evolving consumer needs” and expects trading conditions to improve in the second half of FY26 as GST transitions smooth out and festive demand picks up.
Priya Nair, who took over the reins of the company as the first female chief executive and managing director from August, said the company delivered a “competitive performance” despite transitory disruptions and described the GST rate cuts as a “positive step” that should bolster consumption and consumer sentiment once markets stabilise.
In the equity market, HUL shares rose around 3 percent in early trade following the results, reflecting investor relief over the profit uptick and tax settlement outcome. However, analysts cautioned that the earnings boost was largely one-time in nature, while operational growth indicators—especially volume and margins—remained weak.
For investors, the key focus now shifts to whether HUL can revive volume growth in the coming quarters. Sustained rural demand recovery, easing cost pressures, and festive season momentum could help improve performance in the second half. On the other hand, persistent inflation, regulatory changes, or weak consumer sentiment could keep margins and growth subdued.
Overall, HUL’s Q2 performance was steady but unspectacular. While the one-off tax gain lifted the bottom line, the underlying operating picture remains cautious. The company’s near-term prospects hinge on the pace of demand recovery and its ability to sustain margins in a competitive FMCG landscape.
