Hindustan Unilever Limited (HUL) has released its results for the first quarter of FY2025-26, i.e., Q1FY26. The company's net profit has exceeded market expectations, resulting in a positive impact on its shares. Following the announcement of the results, the company's share price rose by three percent to over ₹2500 around 10 am.
Key Quarterly Figures
HUL has reported a standalone profit of ₹2732 crore in the June quarter, compared to a market estimate of ₹2535 crore. This means the profit exceeded estimates by approximately ₹200 crore. The company's total income stood at ₹15931 crore, slightly below the estimated ₹15945 crore.
Regarding the company's EBITDA, the figure was ₹3558 crore, while the market estimate was ₹3595 crore. The margin stood at 22.3 percent, compared to an estimated 22.5 percent.
Year-on-Year Comparison
In the same quarter last year, the company's profit was ₹2538 crore, which has increased to ₹2732 crore this time. This represents a year-on-year increase of approximately 7.6 percent in the company's profit. Income also saw a growth of 3.9 percent. There has been a slight decrease in EBITDA compared to last year, from ₹3606 crore to ₹3558 crore. The margin has also decreased from 23.51 percent to 22.33 percent.
Volume Growth Offers Relief
HUL has recorded a domestic volume growth of 4 percent in this quarter. This figure is within the market's expectation of 3 to 4 percent. This indicates that demand in rural areas remains stable, and there has been no significant decline in consumer-level product consumption.
Share Performance
HUL's shares have shown mixed performance recently. It has increased by about 3 percent in one week and shown a growth of 10 percent in one month. However, if we talk about the whole year, it has fallen by about 7 percent. In the three-year period also, it has declined by 4 percent.
Impact on Input Costs and Margin
Despite good growth in the company's profit, there is pressure on operating margin and EBITDA. The main reason for this is believed to be the increase in input costs, i.e., raw material prices. The impact of increasing costs is clearly visible on FMCG companies these days, which is affecting the margin.
For a large company like HUL, the increase in input costs and the pressure on margin signals the market that there may be changes in prices or other strategies in the future.
Stock Market Reaction
After the quarterly results, HUL's shares initially saw good gains. It climbed up to 3 percent to cross ₹2500. However, as the day progresses, the market movement and investor reaction will determine whether the share can maintain this level or not.
Rural Demand Remains Strong
According to the company's report, demand from rural markets remains stable. Especially the trend towards essential consumer goods remains the same, which has supported volume growth. The consumer spending situation in villages is considered somewhat better than in cities, which has supported FMCG brands like HUL.
Segment-Wise Performance
Similar levels of demand have been observed in the company's various product categories this quarter. Daily-use products such as soaps, shampoos, detergents, and the skincare segment have shown stability. Demand for premium products in some segments appeared slightly weaker, but overall, broad-based demand remains.
No Major Change in HUL's Strategy
The company has indicated that it will not take any major price increase steps for the time being, considering the current situation. However, work will continue to improve the margin by controlling input costs and making the supply chain efficient.
Market Experts Will Keep an Eye
After this quarter's results of HUL, market experts will keep an eye on the company's future strategies. Especially the future course will be determined by points like possible softening in input costs, strengthening in rural demand and changes in product pricing.
Activity among Investors After Results
Many investors in the market are now assessing whether these results can bring long-term strength to HUL's shares or whether this is just a temporary surge. Some investors may also adopt a cautious approach due to margin pressure.
