HUL shares tank 7% as June-quarter profit declines; leads Nifty losers

Hindustan Unilever Ltd (HUL) shares tumbled nearly 7% on Tuesday after the company reported a 4% year-on-year decline in standalone net profit. The FMCG heavyweight emerged as the top Nifty loser as investors reacted negatively to its earnings report.

The company’s shares opened at ₹2,174 and touched an intra-day low of ₹2,019. Finally, the stock ended at ₹2,023, down 6.97%, with a market capitalisation of ₹4.75 lakh crore.

The FMCG major posted a standalone net profit of ₹2,631 crore during the quarter, compared with ₹2,732 crore in the corresponding period last year. The company said inflationary pressures on key commodities, along with expenses partly linked to the ongoing conflict in West Asia, squeezed margins during the quarter.

"Commodity volatility persists, with inflationary pressures expected to continue in the short term," Hindustan Unilever said. Reflecting the cost pressures, the company's standalone core earnings margin contracted by 40 basis points to 22.8%.

Despite the pressure on earnings, HUL's standalone revenue from the sale of products rose 10% year-on-year to ₹16,514 crore from ₹15,003 crore, supported by a 5% increase in underlying volumes.

On a consolidated basis, revenue increased 10.3% to ₹17,149 crore, which the company described as its highest quarterly turnover in the last 13 quarters. Consolidated net profit attributable to owners declined 3% to ₹2,673 crore.

The company also incurred restructuring expenses of ₹115 crore and acquisition- and disposal-related costs of ₹5 crore during the quarter. Excluding these one-time items, HUL said its profit grew 9% to ₹3,623 crore.

“Despite global geopolitical volatility, the Indian economy demonstrated resilience, supported by proactive fiscal and monetary policy measures. The underlying demand environment remained stable during the quarter,” Chief Executive Officer and Managing Director Priya Nair said.

"The performance reflects the strength of our brands, the increasing competitiveness of our portfolio, and the disciplined execution of our strategic priorities. As our investments in market development, channel expansion, and portfolio transformation continue to scale, we are building a stronger, future-fit business. While we continue to navigate the short-term dynamic environment, we remain focused on driving volume-led revenue growth," Nair added.

Among business segments, Home Care remained the strongest performer, delivering 14% underlying sales growth, led by robust demand for fabric wash and household care products. Beauty & Wellbeing recorded 11% growth, driven by premium hair care products and future-format offerings, while Minimalist continued to post double-digit growth. HUL, however, flagged a softer performance at OZiva as the business underwent a transition following the acquisition of the remaining stake.

The Foods business reported 7% underlying sales growth, supported by strong coffee sales and steady demand across premium tea products.