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Informist, Thursday, Jul. 23, 2026

 

By Simran Rede

 

MUMBAI – Hindustan Unilever Ltd. is expected to report a year-on-year fall in net profit for the June quarter after rising for six consecutive quarters. This is likely due to a rise in input costs for most of the quarter owing to the war in West Asia. Its revenue from operations is likely to rise for the third straight quarter with slow but steady growth, aided by price hikes.

 

The fast-moving consumer goods major's bottom line is expected to decline nearly 3% on year to INR 27.82 billion in the June quarter, according to the average of estimates from 12 brokerages. The highest estimate for net profit is INR 28.97 billion from Nuvama Wealth Management Ltd. and the lowest is INR 26.68 billion from Emkay Global Financial Services Ltd. "PAT growth is likely to be flat YoY (year-on-year) due to re-estimated tax provision in base quarter leading to lower effective tax rate of 16.2%," Nuvama said.

 

The company's top line is projected to rise around 8% on year to INR 171.77 billion, as per the average of estimates. Revenue estimates range from a high of INR 179.17 billion from YES Securities (India) Ltd. to a low of INR 163.30 billion from Anand Rathi Share and Stock Brokers Ltd.

 

The Indian arm of the UK-headquartered company's earnings before interest, tax, depreciation, and amortisation are expected to rise 11% on year to INR 39.48 billion, as per the average of 11 estimates. The highest estimate for EBITDA is INR 40.85 billion from YES Securities and the lowest is INR 38.19 billion from Prabhudas Lilladher Pvt. Ltd. 

 

On a sequential basis, HUL's net profit is likely to rise 2.5% and revenue by over 9%. The EBITDA is seen rising 6% from the trailing quarter. 

 

The rise in raw material costs during the quarter is likely to contract EBITDA margin by around 50-90 basis points on year to 22.2-23.1%. However, the 2-4% price hikes taken earlier in the quarter are likely to partially offset higher input costs. Moreover, lower advertising and promotion costs and the demerger of its ice-cream business are expected to support EBITDA margin, according to brokerages. The margin is likely to benefit by 50-60 bps from the demerger of the ice-cream business, which was a low-margin business, according to Motilal Oswal Financial Services Ltd. 

 

The FMCG major's gross margin for the quarter is likely to contract 50-130 bps on year to 49.0-49.6% due to higher palm oil and crude oil prices. HUL uses palm oil to make soaps and cosmetics, and crude oil for packaging material. Steady demand for its products despite price hikes is expected to result in a 5.0-6.5% growth in underlying volume for the June quarter. "We expect the urban middle class to continue to trade up across FMCG categories, driving volume and mix improvement," according to Axis Securities Ltd.

 

Homecare and Beauty and Wellbeing segment is expected to deliver double-digit sales growth, led by a mix of volume and price, according to PhillipCapital (India) Institutional Equities. It expects the personal care segment to grow on the back of price hikes amid subdued demand. The food and beverages segment is likely to report a 5–6% growth.

 

The company will declare its results for the June quarter Tuesday. Investors will watch for management's commentary on raw material costs and pricing, according to Systematix Shares and Stocks (India). The performance of the company's soaps, mass skin care, and nutrition segments will also be monitored.

 

Thursday, shares of HUL ended 0.3% higher at INR 2,161.80 apiece on the National Stock Exchange. The stock is down 4% since the company reported its March quarter earnings on Apr. 30. It is down almost 28% from its all-time high of INR 2,985.45 hit on Sept. 23, 2024.

Of the 16 research reports on the company available with Informist, 13 have a 'buy' or an equivalent recommendation on the stock and three have a 'hold' or an equivalent call. The average target price for the 'buy' recommendations is INR 2,710 per share, implying an over 25% upside to the current market price.

The following are the Apr-Jun earnings estimates for Hindustan Unilever from 12 brokerages, in descending order by net profit estimate, in INR billion:

 

Brokerage	Net Sales	Net Profit	EBITDA
Nuvama Wealth Management Ltd.	175.16	28.97	40.39
PhillipCapital (India) Pvt. Ltd.	171.36	28.55	39.66
Bank of America global research	171.31	28.48	39.80
YES Securities (India) Ltd.	179.17	28.48	40.85
Systematix Shares and Stocks (India) Ltd.	177.51	28.44	40.19
JM Financial Institutional Securities Pvt. Ltd.	170.92	27.85	39.90
Motilal Oswal Financial Services Ltd.	172.10	27.80	39.90
Kotak Securities Ltd.	166.88	27.52	38.79
Axis Securities Ltd.	169.48	27.37	38.21
Prabhudas Lilladher Pvt. Ltd.	171.26	26.89	38.19
Anand Rathi Share and Stock Brokers Ltd.	163.30	26.77	--
Emkay Global Financial Services Ltd.	172.78	26.68	38.44
Average	171.77	27.82	39.48

 

End

 

Edited by Shubhayan Bhattacharya

 

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