HUL shares fall 7% as Q1 attributable profit drops 3% to ₹2,673 crore
Turnover grows to ₹17,184 crore, driven by 10% underlying sales growth and 5% volume growth
Hindustan Unilever Ltd. (HUL) disclosed a 3% decrease in Q1 FY27 net profit attributable to owners, reaching ₹2,673 crore, down from ₹2,756 crore in the same quarter last year. This decline occurred despite a 10% underlying sales growth and 5% volume growth, driven by rising commodity inflation. HUL's total turnover grew to ₹17,184 crore.
EBITDA margin contracted by 40 basis points to 23%. Investors focused on profitability and potential further price increases following the profit drop. HUL shares fell 6.99% to ₹2,022.70 on Tuesday. The profit decline was largely due to a one-off tax credit in the preceding year. The FMCG giant shifted from a pricing-led recovery to an investment-led strategy, focusing on premiumisation, digital-first beauty, nutrition, and other underpenetrated categories.
Management increased prices by around 5% during the quarter, passing on only half the inflation absorbed. With input costs expected to rise 2-5% sequentially, calibrated price hikes, cost savings, and brand investments will be crucial. HUL increased advertising and promotion spending to its highest level in 11 quarters, emphasizing market development over short-term margin protection.
The company has allocated capital expenditure of up to ₹2,000 crore over two years, targeting premium formats, liquid products, automation, digital technologies, and a more flexible supply chain. Home Care was the strongest business, delivering 14% underlying sales growth and high-single-digit volume growth. Beauty & Wellbeing, Hair Care, and Premium Skin Care also showed double-digit growth driven by premium offerings.
Digital-first beauty emerged as a key growth engine with a ₹2,000 crore annual revenue run rate. Personal Care remained the weakest segment. HUL anticipates stronger FY27 growth than FY26 despite ongoing commodity inflation, relying on input-cost trends, monsoon, energy, and palm-oil prices, and the success of premium categories to offset weaknesses in soaps and personal care.
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