28-Oct-2026 20:00:34
HINDUSTAN UNILEVER Q2 CONCALL: UNDERLYING SALES GROW 15%, VOLUMES RISE 7%; EBITDA UP 8%, MANAGEMENT MAINTAINS 22–24% MEDIUM-TERM MARGIN OUTLOOK
MANAGEMENT GUIDANCE & OUTLOOK • MANAGEMENT MAINTAINS MEDIUM-TERM EBITDA MARGIN GUIDANCE OF 22–24%, WHILE PRIORITISING VOLUME GROWTH & MARKET SHARE OVER IMMEDIATE MARGIN RECOVERY • MANAGEMENT EXPECTS STRUCTURAL GROSS MARGIN IMPROVEMENT OVER THE NEXT 3–5 YEARS, SUPPORTED BY PREMIUMISATION, PRODUCT MIX & OPERATING EFFICIENCIES • MANAGEMENT EXPECTS COMMODITY INFLATION TO MODERATE FROM RECENT LEVELS, BUT HAS NOT CONFIRMED A DEFINITIVE PEAK IN RAW MATERIAL PRICES • MANAGEMENT AIMS TO GROW AHEAD OF THE FMCG MARKET THROUGH HIGHER PRODUCT PENETRATION, PREMIUMISATION, INNOVATION & DISTRIBUTION EXPANSION • MANAGEMENT EXPECTS RURAL DEMAND RECOVERY & PREMIUM CATEGORY GROWTH TO SUPPORT BUSINESS MOMENTUM, BUT HAS NOT PROVIDED SPECIFIC FY27 REVENUE OR PAT GUIDANCE FINANCIAL PERFORMANCE & SEGMENTAL GROWTH • Q2 TURNOVER STOOD AT ₹18,071 CR, WITH UNDERLYING SALES GROWTH OF 15% & UNDERLYING VOLUME GROWTH OF 7%, THE STRONGEST UNDERLYING SALES GROWTH IN 14 QUARTERS • Q2 EBITDA GREW 8% YOY TO ₹4,089 CR, WHILE EBITDA MARGIN DECLINED 140 BPS TO 22.6% DUE TO COMMODITY INFLATION • Q2 PAT BEFORE EXCEPTIONAL ITEMS GREW 9% YOY TO ₹2,795 CR, WHILE REPORTED PAT REMAINED BROADLY FLAT DUE TO A HIGHER ONE-OFF TAX GAIN IN THE PREVIOUS YEAR • H1 FY27 TURNOVER REACHED ₹35,255 CR, WITH UNDERLYING SALES GROWTH OF 12% & VOLUME GROWTH OF 6% • HOME CARE UNDERLYING SALES GREW 22% YOY, WITH DOUBLE-DIGIT VOLUME GROWTH; SEGMENT EBIT MARGIN STOOD AT APPROXIMATELY 16% AMID PETROCHEMICAL COST PRESSURE • BEAUTY & WELLBEING UNDERLYING SALES GREW 16% YOY, SUPPORTED BY DOUBLE-DIGIT VOLUME GROWTH IN HAIRCARE & SKINCARE • PERSONAL CARE UNDERLYING SALES GREW 9% YOY, SUPPORTED BY STRONG DOVE & PEARS PERFORMANCE, WHILE ORAL CARE REMAINED SUBDUED • FOODS UNDERLYING SALES GREW 9% YOY, LED BY COFFEE, NUTRITION & PACKAGED FOODS, WHILE MASS TEA DEMAND REMAINED WEAK MARGINS, DISTRIBUTION & KEY RISKS • Q2 GROSS MARGIN CONTRACTED APPROXIMATELY 400 BPS YOY, WHILE UNDERLYING PRICING GROWTH STOOD AT AROUND 8%; OPERATING EFFICIENCIES PARTLY OFFSET INPUT COST PRESSURES • COMPANY ADDED APPROXIMATELY 30,000 GENERAL TRADE OUTLETS DURING Q2; MANAGEMENT REMAINS POSITIVE ON DEMAND, BUT COMMODITY INFLATION, VOLUME SUSTAINABILITY & MARGIN RECOVERY REMAIN KEY RISKS INVESTOR TAKEAWAY: POSITIVE ON GROWTH, CAUTIOUS ON MARGINS — STRONG 7% VOLUME GROWTH, BROAD-BASED CATEGORY MOMENTUM & PREMIUMISATION SUPPORT THE OUTLOOK. HOWEVER, EBITDA GROWTH OF 8% TRAILED UNDERLYING SALES GROWTH OF 15%, MAKING GROSS MARGIN STABILISATION & PROFITABILITY RECOVERY THE KEY MONITORABLES.
HINDUSTAN UNILEVER LTD.