HUL Q4 FY25 Results: Net Profit Declines by 3.67% Amidst Subdued Demand

Hindustan Unilever (HUL), India's largest fast-moving consumer goods (FMCG) company, reported a dip in consolidated net profit for the fourth quarter of fiscal year 2025, highlighting the continued impact of subdued demand conditions across the sector. The company's focus appears to be on managing margins and transforming its portfolio amidst a challenging market environment. After the announcement, the share price of HUL declined by -3.82% and is currently trading at ₹2330.

Financial Performance Overview

For the quarter ended March 31, 2025, HUL's consolidated net profit declined by 3.67% year-on-year to ₹2,464 crore, down from ₹2,558 crore in the corresponding period last year. Sequentially, the consolidated net profit saw a sharper decline of 17.4%. Consolidated total income rose 3.5% year-on-year to ₹15,979 crore. Revenue from product sales stood at ₹15,416 crore, a 2.68% increase from ₹15,013 crore in Q4 FY24.

The company reported an Underlying Sales Growth (USG) of 3% and an Underlying Volume Growth (UVG) of 2% for the quarter. Despite a slight increase in EBITDA to ₹3,466 crore from ₹3,435 crore previously, the EBITDA margin fell by 30 basis points to 23.1%. The gross margin also saw a decline, falling 160 basis points year-on-year to 49.8% in Q4. For the full fiscal year 2025, HUL's turnover surpassed ₹60,000 crore, with an Underlying Sales Growth of 2% and an EPS growth of 5%. Absolute volume tonnage grew in mid-single digits but was partially offset by a negative mix.

Segment Highlights

Hindustan Unilever Limited (HUL) reported a mixed performance across segments in Q4 FY25:

Home Care revenue rose to ₹5,818 crore (from ₹5,715 crore YoY), with mid-single digit volume growth in Fabric Wash and high-single digit growth in Household Care. However, pricing was negatively impacted by commodity deflation and competition.

Beauty & Wellbeing grew to ₹3,113 crore (vs ₹2,987 crore), led by strong double-digit volume growth in Hair Care. Skin Care and Colour Cosmetics declined slightly due to weaker mass market performance. Digital and emerging channels showed double-digit growth.

Personal Care revenue edged up to ₹2,124 crore (from ₹2,063 crore), with Skin Cleansing and Oral Care posting low-single digit price-led growth, driven by non-hygiene categories.

Foods declined slightly to ₹3,886 crore (from ₹3,911 crore), as growth in most sub-segments was offset by a drop in Nutrition Drinks amid category challenges. Tea posted modest price-led growth despite high inflation, while Coffee grew in double digits.

Others (Exports and Consignment) rose significantly to ₹263 crore from ₹181 crore YoY. This performance reflects stable demand in core categories and continued investment in growth channels, despite sectoral headwinds.

Dividend Announcement

HUL's board recommended a final dividend of ₹24 per share for the fiscal year ended March 31, 2025. Coupled with the interim dividend of ₹19 and a special dividend of ₹10 paid in November 2024, the total dividend for FY25 amounts to ₹53 per share. The record date for the final dividend is set as June 23, 2025.

Outlook and Strategy

In FY25, Hindustan Unilever (HUL) accelerated its portfolio transformation through increased innovation in high-growth segments, strategic investments in future channels, and key portfolio actions including the acquisition of D2C brand Minimalist, which crossed ₹500 crore in turnover and the divestment of Pureit. The company also announced plans to demerge its Ice Cream business.

Looking ahead, HUL expects demand to improve gradually, with stronger growth anticipated in H2 FY26. If commodity prices remain stable, volume growth is projected to outpace price growth, which is expected to remain in the low-single digit range. Inflation in palm oil and tea may drive selective price increases, particularly in skin care.

The company plans to increase investments to support its transformation agenda. While gross margins may moderate, EBITDA margins are expected to remain healthy at 22-23%. HUL remains focused on volume-led competitive growth and reinforcing its market leadership.

Market Reaction

Following the results announcement, HUL's shares initially saw an uptick by opening at ₹2423.80, but later came under pressure. Share price declined by -3.82% on the NSE, trading around ₹2,330.

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