HUL Q3 profit ​up 19% on exceptional gains; CEO flags subdued demand

Hindustan Unilever Ltd's (HUL) standalone net profit for the October-December 2024 quarter surged 19% year-on-year (YoY) to Rs 3,001 crore, on account of profit from the divestment of ‘Pureit’ business while PAT bei (or profit after tax before exceptional items) was flat. The profit for the same quarter last year stood at Rs 2,519 crore.

HUL reported an underlying sales growth (USG) of 2% and a flat underlying volume growth (UVG) in the said quarter. HUL says while absolute volume grew competitively, it was offset by a negative mix. The company's EBITDA margin at 23.5% continued to remain healthy.

In terms of 9-month performance, HUL's turnover at Rs 45,680 crore grew 2%, driven by 2% UVG. The company's EBITDA at 23.7% declined by 30 bps, while net profit surged 6% while PAT (bei) was flat.

Rohit Jawa, CEO and Managing Director, HUL, says FMCG demand trends remained "subdued" in Q3 FY25, with continued moderation in urban growth while rural sustained its gradual recovery. "We delivered competitive growth by driving unmissable brand superiority, investing behind brands and capabilities whilst maintaining healthy margins."

Java also talked about the acquisition of the premium actives-led beauty brand Minimalist, which he said will grow the company's Beauty & Wellbeing portfolio. "While we keep a close watch on the pace of recovery and the broader economic outlook in the short term, we remain confident of the medium to long term opportunity in the Indian FMCG sector and HUL’s ability to grow competitively," says Jawa.

Here's how the company's business segments performed in Q3 FY25.

Home Care: Home Care USG was 6% led by high-single digit UVG in Fabric Wash and Household Care. Liquid portfolio maintained its double-digit growth trajectory. Household Care achieved high-single-digit UVG led by outperformance in dishwash.

Beauty & Wellbeing: HUL says Hair Care continued to gain momentum, Skin Care was impacted by delayed winter. Beauty & Wellbeing reported flat 1% growth while UVG witnessed a low-single-digit decline. Hair Care delivered mid-single-digit volume growth, while Skin Care, impacted by delayed winter and Colour cosmetics had a muted quarter.

Personal Care: The quarter saw HUL's revenue impacted due to a decline in the hygiene segment of skin cleansing, says HUL. Personal Care declined 4% with a mid-single digit volume decline. Strategic actions in Skin Cleansing have led to share gain in the quarter. HUL says a positive momentum was witnessed in the non-hygiene segment.  

Foods: HUL saw a sequential improvement in Packaged Foods and Beverages businesses, though foods had a flat USG with mid-single-digit price growth offset by a decline in volume. Tea delivered low-single-digit growth led by premium brands such as 3 Roses and Taj Mahal. The category maintained its value and volume leadership. Coffee grew double-digit, led by strong performance in organized trade. Nutrition drinks continued to strengthen their value and volume market leadership while the category declined due to subdued consumption. HUL says it took actions to accelerate consumption through adjustments to pricing architecture for consumption packs executed in the quarter.