The country’s largest consumer goods company, Hindustan Unilever (HUL), saw its first-quarter standalone net profit (Q1FY25) rise 2.7% year-on-year to Rs 2,538 crore, meeting street estimates for the period. A poll of analysts by Bloomberg had pegged Q1 profit at Rs 2,561 crore. The company indicated in a post-results media call on Tuesday that it was closely monitoring rural areas, which had shown “some green shoots of recovery” in the last few months.

Revenue, which includes the sale of products and other operating income, rose 1.3% year-on-year to Rs 15,339 crore in Q1, which was in line with analysts’ estimates of Rs 15,325 crore for the period. Volume growth for the June quarter stood at 4% versus 3% seen in the same period last year. Q1 volume growth was also ahead of the 2% volume growth the company saw for three straight quarters between Q2FY24, Q3FY24 and Q4FY24. 

HUL’s CEO & MD Rohit Jawa admitted on the media call that market volume recovery had been gradual in the last two years and lower than its expectations.

“Market volume growth has been lower than what we would have liked due to the impact of sustained high inflation combined with erratic weather patterns. Consequently, rural growth which used to surpass urban growth had lagged behind urban over the last one year. In the last few months, there is some progress in rural areas,” Jawa said.

Earnings before interest, tax, depreciation and amortization (Ebitda) rose 2.4% year-on-year to `3,606 crore, in line with street estimates of Rs 3,614 crore for the period. Ebitda margin at 23.5% increased by 30 basis points year-on-year. One basis point is one-hundredth of a percentage point.

“We continue to focus on operational excellence and build back our gross margins with a substantial part of this being reinvested behind brands and capabilities,” Jawa said.

Revenue for the home-care division — the biggest contributor to the topline — grew 4.6% year-on-year to Rs 5,675 crore in the June quarter, while foods and beverages rose 1.4% versus last year to Rs 3,850 crore. The beauty and wellbeing segment grew 3.09% year-on-year to Rs 3,199 crore and personal care revenue slipped 4.48% in Q1 versus last year to Rs 2683 crore.

Shares of HUL closed trade 1.17% up on the BSE on Tuesday to Rs 2,766.50 on a day when FMCG stocks were the top sectoral gainers due to the thrust on consumption in the Union Budget 2024. In the last month, HUL shares have rallied 13.3% on the BSE.