Hindustan Unilever Q2 net profit falls to Rs 2,591 crore, misses estimates; Rs 29 per share dividend declared

Hindustan Unilever Q2 FY25 results

Hindustan Unilever Ltd's Q2 FY25 consolidated net profit declined 2.4 percent to Rs 2,591 crore from Rs 2,668 crore in the same quarter a year ago, falling more than Street expectations. A Moneycontrol poll of seven brokerages showed that HUL's July-September net profit was expected to fall half a percent to Rs 2,654 crore from a year ago.

The FMCG giant's second quarter consolidated revenue expanded 2.1 percent on-year to Rs 16,145 crore, against the Moneycontrol poll prediction of Rs 15,694 crore.

Hindustan Unilever's Q2 results were expected to be marred by high commodity inflation in certain segments, along with muted demand. Ahead of the results, brokerages expected HUL's margins to shrink due to higher advertisement spends and increased royalty to parent Unilever Ltd.

Earnings before interest, tax, depreciation, and amortization (EBITDA) for the quarter stood at Rs 3,647 crores. The EBITDA margin, at 23.8 percent, continued to remain healthy.

Rohit Jawa, CEO and Managing Director said, "In September quarter, FMCG demand witnessed moderating growth in urban markets while rural continued to recover gradually. In this context, we delivered a competitive and profitable performance. We continued to execute on our strategic priorities of transforming our portfolio whilst generating healthy EBITDA margin and cash flows, providing attractive returns to our shareholders. We remain watchful of gradual recovery in consumer demand while creating a sustained competitive advantage through our business fundamentals: investing behind our aspirational brands, scaling market-making innovations and maintaining operational rigor."

Home Care reported revenue of Rs 5,737 crore in Q2 and strong volume-led growth momentum continues as it grew eight percent with high-single-digit UVG. Fabric Wash and Household care
volumes grew in high-single digit. Liquids portfolio witnessed a strong double-digit volume growth.

The company said in the investor presentation that they continued to strengthen liquids segment with the expansion of Rin liquid and forayed into the floor cleaner market with a superior product under the Vim brand. The market development journey in fabric enhancers was
bolstered by the launch of Comfort beads.

Beauty & Wellbeings' revenue stood at Rs 3,323 crore. This segment reported high single digit intrinsic growth led by volume. It grew by seven percent with mid-single digit UVG. Hair Care continued to grow in high-single digit led by outperformance in Sunsilk, Dove and Tresemme. Skin care and Colour cosmetics delivered a mid-single digit growth. Premium Skin portfolio maintained its double-digit growth trajectory.

Personal Care reported a revenue of Rs 2,412 crore and showed sequential improvement in turnover led by the premium portfolio. The segment declined five percent with negative pricing and low-single digit volume decline. Skin cleansing declined primarily on account of pricing actions taken during the year.

Premium portfolio grew ahead of the segment and within that bodywash continued to strengthen its market leadership with high double-digit growth. Oral Care delivered a competitive high-single digit growth led by Closeup.

"There will be price increases in the December quarter in skin cleansing and tea segment amid commodity inflation," said Ritesh Tiwari, Executive Director, Finance and CFO of HUL.

Foods & Refreshment witnessed marginal decline in revenue of Rs 3,803 crore. This segment declined two percent with a low-single-digit volume decline. Tea continued to cement its market leadership through value and volume share gains. Green and Functional tea maintained their strong volume growth however overall category volumes remained subdued.

Coffee grew in double digits. Nutrition drinks continued to gain market shares while consumption remained subdued. Foods grew volumes in low-single digit.

"Ice-cream maintained its volume vis-à-vis last year. Horlicks ₹10 sachet, Diabetes
Plus chocolate flavour, Knorr’s Korean Kimchi Soup and Kissan’s 100% Fruit based spread were launched in the quarter," the company said in its investor presentation.

HUL declared a total interim dividend of Rs 29 per equity share, including a regular interim dividend of Rs 19 and special dividend of Rs 10, for the financial year 2024-25. 'The record date for the purpose of determining the entitlement of the shareholders for the interim dividend has been fixed as Wednesday, 6 November, 2024, and dividend will be paid to the shareholders on 21 November, 2024," Hindustan Unilever said in a results filing to stock exchanges.

On October 23, HUL's shares on BSE closed trading 24.05 lower at Rs 2658 apiece.