HUL Q1 Results: Profit Up 2%, Volume Growth Highest In Five Quarters

Hindustan Unilever Ltd.'s first-quarter profit rose, meeting analysts' estimates, driven by moderate uptick in volume even as revenue growth slowed on account of price cuts in the home and personal care divisions.

The consolidated net profit of India's largest consumer goods maker rose 2.2% year-on-year to Rs 2,612 crore in the quarter-ended June, according to an exchange filing. That compares with the Rs 2,601-crore consensus estimate of analysts tracked by Bloomberg.

HUL Q1 FY25 Key Highlights (Consolidated, YoY)

• Revenue up 1.4% at Rs 15,707 crore (Bloomberg estimate: Rs 15,587 crore).

• Ebitda up 2.2% at Rs 3,744 crore (Bloomberg estimate: Rs 3,690 crore).

• Margin at 23.8% versus 23.7%. Analysts had pegged the metric at 23.7%.

Volume grew 4% over a year ago in Q1, as compared with 2% in the preceding three months, according to the company.

"The first quarter performance reflects our decisive actions of transforming our portfolio in high growth spaces aided by gradual recovery of rural markets," said Chief Executive Officer and Managing Director Rohit Jawa. The pace of improvement going forward will depend on how soon the rural market revives. "It will depend on employment generation, a good monsoon for the rest of the season and other macro factors like inflation."

Prices of key commodities, except tea, remained benign on a deflationary base during the quarter. Looking ahead, Jawa expects "near-zero" price growth, if input prices remain where they are.

He also expects to maintain operating margin at current levels.

Key Segment-Wise Highlights

• Revenue from home care rose 4.6% to Rs 5,673 crore, with high-single digit volume growth.

• Beauty and wellbeing grew 3.5% to Rs 3,281 crore, with mid-single digit volume growth.

• Personal care revenue fell 4.4% to Rs 2,386 crore, but delivered low-single-digit volume growth.

• Food and refreshments revenue grew 1.4% to Rs 3,850 crore, with flat volume growth.

The food business was impacted by a harsh summer season, according to the company. Its nutrition drinks—Horlicks and Boost—had subdued performance in the quarter. Tea sales were impacted because of lower production, but coffee delivered double-digit growth driven by pricing.

HUL's ice-cream delivered double-digit volume growth aided by strong launches during the summer season. The packaged consumer goods maker is still evaluating the future of this business that contributes less than 3% to its turnover. "We will be able to share the direction for the ice cream business in India by the end of this year," said Ritesh Tiwari, chief financial officer at HUL, during a post-earnings media briefing.

The skincare and colour cosmetics segment recorded muted volume growth with mass portfolio declining.

Jawa said that the company's strategy of premiumisation across its portfolio is yielding positive results. Over the past three years, the contribution from the premium portfolio has risen by 300 basis points.

Shares of HUL closed 1.09% higher ahead of the announcement, as compared with a flat benchmark S&P BSE Sensex.