More Stories

Informist, Thursday, Jul. 31, 2025

--HUL: Invested in capabilities, across different lines of P&L in Jun qtr 
--CONTEXT: Comments by HUL mgmt in post-earnings call with news wires 
--HUL: Expect our investment drive to continue for few more quarters 
--HUL:See broad-based improvement, rural ops continue to grow ahead of urban 
--HUL: Impact of tariffs on US exports will be insignificant for co 
--HUL: Urban areas seeing a gradual improvement in demand 
--HUL: Expect improvement in urban ops demand to sustain 
--HUL: Passed on benefits of lower tea prices in Jun quarter 
--HUL: Expect rural areas to outgrow urban ops in near-to-medium term

By Pallavi Singhal and Anand JC

NEW DELHI -  Hindustan Unilever Ltd. will continue its investment drive over the next few quarters, building on the momentum gained in the quarter ended June, its management told reporters in a post-earnings press call Thursday. HUL expects its investments to fuel growth in core portfolio, Chief Financial Officer Ritesh Tiwari said.

"We stepped up investments now because we're seeing the impact of the portfolio transformation journey that we have been on, in the last couple of years," Tiwari said. "That (investment) has led to a 5% increase, 5% improvement in contribution for future core and market maker portfolio. So, we have a stronger core and a future facing portfolio," Tiwari added.

HUL has made strategic investments across various lines of its profit and loss statement to drive growth and strengthen its market position, the management said. One key area of investment has been the trade-off between price of the products and cost it incurs to produce them. HUL has chosen to hold on to prices or even reduce them in some cases, despite cost pressures, to remain competitive and pass on benefits to consumers, Tiwari said.

Additionally, the fast moving consumer goods giant has invested in innovation initiatives to develop new products and improve existing ones, in a bid to cater to a change in consumer needs. Investments have also been made towards market research and trade channels to enhance its distribution network and strengthen partnerships with retailers and other stakeholders.

The company has increased is advertising and promotions spend by 40 basis points sequentially, with an additional investment of INR 1.5 billion in the June quarter, the management said. "Our guidance for margin is 22-23% that remains unchanged compared to what you saw in the previous quarter. We will see improvement sequentially in gross margin, but we will invest that back in the business," the management said.

HUL expects demand for consumer products to improve gradually during 2025-26 (Apr-Mar), driven by reduced repo rate, lower retail inflation, income tax relief measures, and forecast of above-average monsoon. Consumption trends have improved sequentially over the past three months, with rural demand continuing to outpace urban demand. 

However, the urban market has shown signs of improvement recently. HUL expects this recovery to sustain but sees growth in rural areas outpace urban areas in the near-to-medium term.

The company expects to deliver better growth in the first half of the current financial year compared to the second half of the previous financial year, driven by both internal and external factors, it said. This growth is expected to be fuelled by its own initiatives and favourable market conditions.

The company does not anticipate a significant impact from the tariffs imposed by the US, given its limited exposure to exports there. While the direct impact is expected to be minimal, the company acknowledges potential indirect effects on the economy and will closely monitor the situation, the management said.  

HUL has been passing on the benefits of lower commodity prices to consumers at least in the 'tea' category, driven by expectations of better production and lower commodity costs compared to the previous year. 

Minimalist, which HUL acquired in the June quarter, delivered a strong performance, with double-digit growth in the quarter since its consolidation. Although this growth is not reflected in the company's underlying sales growth due to the acquisition, the brand's expansion beyond hair care into skin and body care has shown encouraging results, they said. The management said it was optimistic about Minimalist's potential, expecting significant growth contributions over the next 12 months as the brand continues to integrate.

HUL reported an 8% year-on-year rise in Apr-Jun net profit to INR 27.3 billion amid stable demand for fast-moving consumer goods. The bottom line was much higher than the Street's expectation of INR 25.5 billion which would have translated into a 1% growth. Its revenue from operations for the quarter under review was INR 157.5 billion, up nearly 4% on year. This is the highest year-on-year growth in HUL's top line since the 6.5% registered in the June quarter of 2023-24 (Apr-Mar). Consensus estimates had pegged HUL's revenue for the quarter at INR 159.1 billion.

At 1435 IST, shares of the company were up 4.1% at INR 2,537 on the National Stock Exchange.  End

Edited by Vandana Hingorani

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

Informist Media Tel +91 (11) 4220-1000

Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2025. All rights reserved.