Informist, Wednesday, Jul. 30, 2025

By Anand JC

NEW DELHI – Hindustan Unilever Ltd.'s June quarter revenue is expected to grow moderately, but at the fastest rate since the first quarter of 2023-24 (Apr-Mar), as demand for discretionary items and staples continues to recover gradually, according to analysts. The recovery in volume growth during the quarter has likely played out as the company had expected, analysts said.

HUL's June quarter net profit is expected to grow marginally on year to INR 25.5 billion, according to an average of 13 analysts' estimates. However, sequentially, this will be a growth of just over 2%.

"HUL's growth was impacted by several factors, including adverse mix dynamics, input cost inflation, and subdued seasonal demand, collectively moderating the overall growth trajectory," Motilal Oswal Financial Services said in a note.

The company's revenue for the latest quarter is expected to be INR 159.1 billion, up 3.7% on year and 4.6% on quarter, as per analysts' views. This will be higher than the 3% increase registered in the March quarter and the 1.4% growth in the base quarter.

The FMCG major's top line growth is expected to be driven more by volume growth and less by pricing growth. The majority of analysts suggest HUL's underlying volume growth for the June quarter could be around 3-4% on year.

Along with pure volume growth figures, this metric includes the impact of turnover realisation of the products sold. HUL's underlying volume had grown 2% on year in the March quarter and 4% in the base quarter.

In the analyst call after the March quarter earnings, the company's management had said macroeconomic developments were favourable enough for the first few quarters of 2025-26 (Apr-Mar) to be better than FY25. According to analysts, this guidance played out as expected during the June quarter, as some important macroeconomic indicators were favourable.

HUL likely hiked prices across categories by around 0.5% in the June quarter, Nuvama Institutional Equities. The Surf Excel maker likely took slight price hikes in soaps but cut prices of its laundry and dish-wash products, according to Systematix Shares and Stocks (India) Ltd.

Price reductions in the company's home care category is expected to have driven volume growth in the segment, Nuvama said. This segment contributed just over 37% to HUL's top line in FY25, the highest.

While underlying volume growth of the segment was 1.8% on year in the March quarter, Kotak expects it report a 2.5% growth in the latest quarter. "...volume growth (in the segment) was offset by negative pricing growth, higher promotional intensity," the brokerage said.

EXPENSES RISE

HUL's earnings before interest, taxes, depreciation, and amortisation for the June quarter is expected to report a marginal on-year contraction at INR 36 billion, according to an average of 12 analysts' estimates.

During its March quarter earnings call, HUL's management had said that its EBITDA in the future quarters, including in the June quarter, will be negatively affected by higher investments in trade channels, advertisements and promotions, and also 'other expenses' such as brand development and market research.

Including the impact of these expenses, the company had in April guided for an EBITDA margin of 22-23% for the June quarter, lower than its previous guidance of 23-24%. Analysts expect the EBITDA margin to be in line with its guidance in the latest quarter.

"The company has stepped up investments in trade. Given increased business investments, gross margin will see contraction QoQ," Emkay Global Financial Services Ltd. said in a report. The brokerage firm expects HUL's gross margin for the June quarter to be 50%, down 140 basis points on year and 50 bps sequentially.

The fast-moving consumer goods major will disclose its financials for the latest quarter on Thursday.

At 1251 IST, shares of the company traded at INR 2,422.80 on the National Stock Exchange, down 1.2% from the previous close. The shares are largely unchanged since the company reported its March quarter earnings.

Of the 22 brokerage reports on the stock available with Informist, 16 have a ‘buy' or an equivalent call on the FMCG bellwether's shares, at an average of INR 2,698 per share. Of the rest, four brokerages have a 'hold' call on the shares while two have a 'sell' call.

The following are the Apr-Jun earnings estimates for Hindustan Unilever based on reports from 13 brokerage firms in descending order by the estimated net profit:

End

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Deepshikha Bhardwaj

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