MUMBAI: Hindustan Unilever limped through the September quarter with anaemic growth and shrinking margins, a performance that underscores the headwinds buffeting India’s consumer-goods bellwether. The maker of Dove soap and Surf detergent eked out a mere two per cent rise in sales whilst profit after tax before exceptional items slipped four per cent.
Revenue from operations nudged up to Rs 16,034 crore for the quarter ended 30 September 2025, compared with Rs 15,703 crores in the year-ago period. But the real story lay in the margins: EBITDA margin contracted a painful 90 basis points to 23.2 per cent, down from 24.1 per cent last year. The culprit? Surging raw-material costs, which jumped 15 per cent year-on-year to Rs 5,746 crore.
Profit after tax before exceptional items came in at Rs 2,482 crore, down from Rs 2,594 crore in the September 2024 quarter. But here’s where it gets interesting: exceptional items swung the needle dramatically. A one-off Rs 273-crore windfall from resolving tax disputes between UK and Indian authorities turned what would have been a profit decline into a four per cent gain. Reported PAT stood at Rs 2,694 crore versus Rs 2,595 crore last year.
The half-year picture proved equally tepid. For the six months ended September, sales rose just four per cent to Rs 32,330 crore from Rs 31,200 crore. EBITDA for the period came in at Rs 7,539 crore with margins at 23.3 per cent. Profit after tax before exceptionals at Rs 4,960 crore marked a five per cent decline from Rs 5,201 crore in the first half of the previous year.
Segment performance revealed a mixed bag. Home Care, the company’s largest division with Rs 11,441 crore in half-year sales, saw operating profit slip to Rs 2,212 crore from Rs 2,250 crore. Beauty & Wellbeing proved the bright spot, with sales surging 10 per cent to Rs 7,363 crores, though operating profit dipped marginally to Rs 2,060 crore. Personal Care posted a robust four per cent sales growth whilst Foods, contributing Rs 7,885 crore saw profits decline 10 per cent to Rs 1,281 crore.
The company’s acquisition spree added fresh complications. Purchase consideration for business combinations totalled Rs 2,661 crore during the half-year, primarily related to the Minimalist skincare brand acquisition completed in April. This aggressive M&A activity, whilst positioning HUL for future growth, weighed on near-term cash flows and contributed Rs 38 crore in acquisition-related costs.
Managing director and chief executive officer Priya Nair faces a delicate balancing act. The board declared an interim dividend of Rs 19 per share, maintaining shareholder payouts even as profits sputtered. Meanwhile, the proposed demerger of the ice-cream business into Kwality Wall’s (India) Limited awaits regulatory clearances—a restructuring that could reshape HUL’s portfolio but added Rs 51 crore in expenses this quarter.
Cash generation remained robust despite operational headwinds. Operating cash flows for the half-year stood at Rs 6,267 crores, though down from Rs 6,657 crore last year. The company deployed Rs 5,639 crore in dividend payments whilst splashing Rs 617 crore on capital expenditure.
Earnings per share for the quarter came in at Rs 11.43, up marginally from Rs 11.03 last year, though this flattered the underlying performance due to exceptional gains. For the half-year, EPS stood at Rs 23.16 versus Rs 22.14, a five per cent increase that masked the compression in core profitability.
The September quarter’s travails suggest India’s consumption story has lost some fizz. With costs climbing faster than pricing power allows and competition intensifying across categories, HUL’s playbook of premiumisation and market-share gains faces a stern test. The Rs 273-crore tax bonanza provided cosmetic relief this quarter, but the underlying business needs more than accounting alchemy to regain its mojo.
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