HUL Q1 profit falls 4 pc on higher input costs; shares tumble over 6 pc
New Delhi, July 28
FMCG major Hindustan Unilever Ltd on Tuesday posted a 4 per cent year-on-year decline in its standalone net profit to Rs 2,631 crore for the first quarter of FY27, as higher raw material costs and increased expenses weighed on margins despite robust sales growth.
The company had posted a standalone net profit of Rs 2,732 crore in the corresponding quarter last year.
On a consolidated basis, net profit declined 3 per cent to Rs 2,673 crore, while revenue from the sale of products increased 10.3 per cent to Rs 17,149 crore.
Standalone revenue from the sale of products from continuing operations rose 10 per cent to Rs 16,514 crore during the April-June quarter, from Rs 15,003 crore a year earlier, supported by a 5 per cent increase in underlying volumes.
The company's standalone core earnings margin contracted by 40 basis points to 22.8 per cent amid persistent commodity inflation.
"Commodity volatility persists, with inflationary pressures expected to continue in the short term," HUL said in its earnings statement.
During the quarter, the company incurred restructuring expenses of Rs 115 crore and acquisition- and disposal-related costs of Rs 5 crore.
Excluding these one-time items, standalone profit rose 9 per cent to Rs 3,623 crore.
Commenting on the performance, HUL CEO and Managing Director Priya Nair said the Indian economy remained resilient despite global geopolitical uncertainties.
"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," she said.
Following the results, HUL shares came under pressure, falling as much as 6.42 per cent to Rs 2,035, an intraday low on the BSE at around 12:40 pm.
— IANS
Reader Comments
Honestly, a 4% profit drop while revenue grows 10% sounds like inefficiency. But then again, raw material costs are a global issue. The CEO's comment about Indian economy resilience is spot on—we're doing better than many countries despite inflation. Still, seeing HUL shares fall 6% in a day is worrying for retail investors.
Profit down but revenue up—shaandaar juggling? 😅 On a serious note, HUL is still a solid company. The restructuring cost of ₹115 crore is a one-time thing, so I'm not too worried. But I do wish FMCG companies would be more transparent about how much of these "cost pressures" are actually passed on to us consumers. My monthly Kirana bill has gone up by nearly 15%!
Classic case of revenue growth not translating to profit. The underlying volume growth of 5% is decent, but inflationary pressures are real. HUL's margin contraction by 40 bps isn't catastrophic, but the stock drop shows markets are jittery. I'll be watching if they can maintain volumes without raising prices too much. Good reminder to diversify beyond FMCG stocks.
4% profit drop while revenue increases by 10%? That's a classic margin squeeze. I understand global commodity issues, but HUL should be more aggressive on cost cutting. The CEO praising "resilient Indian economy" feels like a Bollywood dialogue—sounds good but doesn't help the aam aadmi who is paying more for everything. 😤
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