Hindustan Unilever clocked 3.6 per cent growth in profit in Q4 with improved volumes helping the FMCG major clock better volumes. In the press conference after earnings, the HUL CEO and Managing Director, Rohit Jawa said that “demand conditions are anticipated to gradually improve going forward.”
FMCG demand has remained subdued in the past few quarters. However, recovery is expected going forward and per brokerage firms, the sector is better positioned to deal with the current market uncertainties. According to Phillip Capital analysis, several factors may support a recovery in the sector. First, the impact of high inflation, slow urban demand, and costly raw materials is beginning to ease. Second, rural demand is expected to improve, supported by another good monsoon. Third, the tax benefits announced in the recent Union Budget are likely to boost consumption.
H1FY26 growth seen better than H1FY25
In terms of growth, HUL expected a gradual improvement during the year led out of portfolio transformation and improving macroconditions while maintaining that H1FY26 will be better than H2FY25. The company CFO, Ritesh Tiwari said, “If commodities remain where they are, price growth is likely to be in the low-single-digit range.”
Furthermore, the FMCG major said that gross margin is expected to moderate as the company continues to deliver the right price-value proposition. Consequently, it said, FY26 EBITDA margin is expected to be within a healthy range of 22-23 per cent, Ritesh Tiwari said.
Rohit Jawa said, “In FY25, our turnover surpassed Rs 60,000 crore, with an underlying sales growth of 2 per cent and an EPS growth of 5 per cent. While absolute volume tonnage grew in mid-single digit, it was partially offset by a negative mix. We delivered a competitive performance, further strengthening our market leadership during the year.”