Fast moving consumer goods (FMCG) bellwether Hindustan Unilever Ltd.'s shares took a sharp tumble on the bourses after reporting its earnings show for the fiscal quarter ended March, which guided for margins that were below the Street's expectations.
Going ahead, in the near- to mid-term, HUL said, "Gross margins are expected to moderate as we continue to deliver the right price-value proposition." This caused investors to sell-off their holdings in droves.
In its investor presentation, the consumer staples company also said, "Stepping up investments to land portfolio transformation in high-growth demand spaces supported by a strong innovation pipeline. Consequently, EBITDA margin to be within a healthy range of 22-23 percent."
Further, the FMCG giant expects earnings growth to gradually improve during the year led out of portfolio transformation and improving macroconditions, with H1FY2026 to be better than H2FY2025.
However, if commodities remain where they are at the current juncture, price growth is expected to be in the low-single digit range. HUL will continue to focus on driving volume-led competitive growth.
At 11.15 am, HUL shares were quoting Rs 2,335, lower by 3.7 percent on the NSE to emerge as the top loser on the Nifty 50 index.
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For the quarter ended March, HUL's standalone profit came in at Rs 2,493 crore, up 3.7 percent compared to the same quarter last year. Hindustan Unilever's standalone revenue rose 2.1 per cent to Rs 15,000 crore.
Personal Care posted a 5 per cent rise in profit with low single-digit sales growth amid pricing pressure. Within the segment, Bodywash grew in double digits, strengthening its market leadership. Non-hygiene products saw high single-digit growth, while skin cleansing reported low single-digit growth.
The Home Care segment contributed Rs 5,815 crore to the consolidated revenue, rising 2 per cent YOY, helped by "outperformance" in premium fabric wash and fabric conditioners, the company said in an investor presentation. Its liquids portfolio also helped boost the sales.
Beverages saw low single-digit growth in tea, led by pricing, while coffee continued double-digit growth, maintaining momentum. The company retained value and volume leadership in tea.
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