Hindustan Unilever (HUL) has projected a more positive financial outlook for the 2027 fiscal year, signaling that the company expects to outperform the previous year despite facing ongoing challenges from commodity inflation. In its recent mid-term outlook, the FMCG giant noted that while it anticipates continued pressure on margins in the short term, strategic efforts involving portfolio and channel transformation remain key to its growth trajectory.
The company is navigating a complex economic environment as global volatility, specifically the conflict in West Asia, triggers a wave of input-cost inflation. This rise in prices affects critical areas such as crude-linked derivatives, packaging materials, and edible oils. While consumer demand has shown resilience, the increased costs pose a risk to margins, forcing the company to strike a delicate balance between driving volume and maintaining profitability without burdening price-sensitive consumers.
According to the company's financial report, the consolidated earnings before interest, taxes, depreciation, and amortisation (EBITDA) margin for the quarter ended September 30 stood at 22.6%, representing a 140-basis-point decline compared to the same period last year. Despite this, HUL maintains that its EBITDA margins will continue to stay within its guided range of 22-24%. The firm achieved a significant milestone during this quarter, reaching a 14-quarter high in underlying sales growth.
HUL reported a turnover of Rs 18,071 crore for the quarter, reflecting an underlying sales growth of 15% and a volume growth of 7%. Profit after tax before exceptional items saw a 9% increase, which the company says underscores its commitment to volume-led, competitive growth. CEO and managing director Priya Nair stated that the resilience of the Indian economy and healthy macroeconomic indicators continue to support a positive consumption environment.
Segment-wise, Home Care emerged as a strong performer with 22% underlying sales growth, bolstered by double-digit volume increases in fabric wash and household care. The Beauty & Wellbeing segment also reported solid results with 16% sales growth, driven by success in hair care, skin care, and colour cosmetics. Meanwhile, the Personal Care business saw a 9% rise in sales, supported by market-focused initiatives for established soap brands, and the Foods business recorded 9% growth, benefiting from momentum in packaged and lifestyle nutrition products.
Looking at the performance for the first half of the current fiscal year, HUL recorded a turnover of Rs 35,255 crore. During this period, the company achieved an underlying sales growth of 12% and a volume growth of 6%. Profit after tax before exceptional items grew by 9%, while EBITDA saw an 8% increase compared to the previous year. To reward shareholders, the board has declared an interim dividend of Rs 19 per share for the financial year ending March 31, 2027.
As the company moves into the second half of the fiscal year, it remains focused on its 'Winning in New India' strategy. By investing in long-term capabilities and brand development, HUL aims to sustain its momentum despite the persistence of inflation. The company’s ability to manage these input costs while continuing to capture market demand during the crucial festival season will likely determine the success of its performance throughout the remainder of the year.
Comments