HUL Tops Q1 Estimates; Signs of Demand Recovery Emerge

Hindustan Unilever Ltd (HUL) reported a 5.6 percent year-on-year (Y-o-Y) rise in consolidated net profit for the April-June quarter of 2025-26 (Q1FY26), beating analysts' expectations. Both rural and urban demand showed signs of improvement, and volume growth rebounded to 4 percent after three quarters.

- Sharleen D'Souza

India's largest fast-moving consumer goods (FMCG) company posted consolidated net profit of ₹2,756 crore in Q1, topping Bloomberg's consensus estimate of ₹2,608 crore. Revenue rose 5.1 percent Y-o-Y to ₹16,514 crore, beating the street estimate of ₹16,076 crore. Sequentially, HUL revenue was up 5.4 percent, and its net profit expanded 11.9 percent.

"We can start to see in market trends, our rural growths that had lagged initially are back to growing every quarter, and they have gradually recovered and are sustaining," said Rohit Jawa, chief executive officer and managing director of HUL, at a press conference following the earnings release. Jawa concluded his 37-year career with Unilever, passing the HUL's leadership to Priya Nair.

While rural markets led the recovery, Jawa noted that urban demand, though still lagging, has started to improve, driven largely by consumption in smaller cities and towns.

The company said part of year-on-year profit increase was due to a one-time tax gain resulting from a reestimation of provisions tied to the potential disallowance of certain prior-year expenses.

Commenting on macroeconomic conditions, Jawa said there are "three thirds of the economy". The top one third by value is the formal urban, followed by the informal urban and then the informal rural.