One-off tax gain lifts HUL profit despite muted volume growth and GST impact
Hindustan Unilever or HUL reported a 4 per cent year-on-year rise in consolidated net profit to Rs 2,694 crore for the quarter ended 30 September 2025 (Q2 FY26), aided by a one-time tax gain. Excluding this exceptional item, profit after tax declined 4 per cent.
The FMCG major’s profit growth was driven by a Rs 184 crore positive impact (part of a total exceptional gain of Rs 273 crore) arising from the resolution of prior tax matters between the UK and Indian authorities. Without this adjustment, profit after tax before exceptional items would have fallen 4 per cent year-on-year.
Revenue Growth Subdued Due To GST Transition
HUL’s consolidated revenue from operations rose 2 per cent year-on-year to Rs 16,061 crore, with underlying sales growth (USG) at 2 per cent and flat underlying volume growth (UVG).
The company attributed the muted topline to the transitory impact of GST rate rationalisation and a prolonged monsoon in several regions. Effective 22 September 2025, the GST rate was reduced to 5 per cent (from 12 or 18 per cent) on around 40 per cent of HUL’s portfolio, including toilet soaps, shampoos, toothpaste and lifestyle nutrition products.
The change disrupted trade channels as distributors cleared older stock before restocking at revised rates, temporarily dampening orders and consumer purchases.
“The quarter saw a transitory impact as the market adjusted to these changes. We anticipate normal trading conditions starting early November, once prices stabilise, paving the way for a gradual and sustained market recovery”, said Priya Nair, CEO and Managing Director, HUL.
HUL’s Ebitda for the quarter stood at Rs 3,729 crore, compared with Rs 3,793 crore a year earlier. The Ebitda margin contracted 90 basis points to 23.2 per cent, reflecting higher investments in marketing and growth initiatives.
The company indicated that margins are likely to remain around current levels as these investments continue, excluding the impact of its upcoming ice cream business demerger.
Also Read | Unilever Pauses Magnum IPO Amid SEC Approval Halt
Standalone Performance
On a standalone basis, HUL reported a net profit of Rs 2,690 crore, up 3 per cent from Rs 2,612 crore in Q2 FY25. Revenue stood at Rs 15,585 crore, a marginal 0.5 per cent increase, while Ebitda declined 2.3 per cent to Rs 3,563 crore, with the margin contracting by 70 basis points to 23.1 per cent.
Segment Performance: Mixed Trends Across Categories
Home Care saw mid-single-digit volume growth but flat sales due to earlier price cuts. Beauty and Wellbeing grew 5 per cent, supported by skincare and health products. Personal Care was hit by the GST transition, with turnover down 5 per cent. Foods and Refreshment posted 3 per cent underlying sales growth, while ice cream sales declined amid extended monsoons.
“We are determined to accelerate our portfolio transformation by sharpening consumer segmentation, transforming our core brands, future-proofing marketing and sales, and investing to scale high-growth demand spaces. These priorities, with a supportive macro environment, will position us to accelerate volume-led growth in the mid-to-long term”, Nair further added, who took command of HUL in August this year.
Market Reaction
Following the results, HUL shares gained nearly 3 per cent in intraday trade on 23 October 2025, reaching Rs 2,667.2 on the NSE. The stock has advanced about 14 per cent year-to-date, while the broader Nifty FMCG index rose over 1 per cent, with Varun Beverages, Colgate-Palmolive (India) and Marico up to 2 per cent.
