HUL's Profit Pressured Despite Steady Revenue Growth
Hindustan Unilever's Q1 revenue grew 10.1% YoY, but profit fell 3.2% as net profit margin contracted sharply.
HUL posted a solid 10.1% YoY revenue increase in Q1 FY27, yet profit declined 3.2%. The net profit margin fell to 15.5%, down 210 basis points from last year.
Hindustan Unilever delivered a mixed performance in the June quarter, with strong top-line growth overshadowed by a significant squeeze on profitability. While revenue climbed to a healthy ₹17,341 crore, profit after tax fell to ₹2,680 crore, highlighting the cost pressures facing the FMCG giant.
The company's revenue grew 10.1% compared to the same quarter last year and 6.1% sequentially from the March quarter. However, profit declined 3.2% year-on-year and dropped a sharper 10.5% quarter-on-quarter. This divergence pulled the net profit margin down to 15.5%, a substantial contraction of 210 basis points from Q1 FY26 and well below the trailing twelve-month average of 22.6%.
A look at the recent quarters shows the volatility in profitability, with a notably strong Q3 FY26 skewing the TTM figure.
Revenue (₹ Cr)
Profit (₹ Cr)
Net Profit Margin (%)
| Metric | CurrentQ1 FY27 | PreviousQ4 FY26 | Same quarter LYQ1 FY26 |
|---|---|---|---|
| Revenue (₹ Cr) | 17,341YoY +10% | 16,351 | 15,757 |
| Profit (₹ Cr) | 2,680YoY -3.2% | 2,994 | 2,768 |
| Net Profit Margin (%) | 15.5YoY -12% | 18.3 | 17.6 |
Key Points
- The company maintains a robust balance sheet with zero debt and a high interest coverage ratio of 34.7.
- Return on Equity remains strong at 21.7%, indicating efficient use of shareholder capital.
- The stock trades at a P/E of 32.1, a notable discount to the broader FMCG industry average.
Despite the quarterly profit dip, HUL's underlying financial health is solid. The focus now shifts to whether management can navigate input cost challenges to restore margins in the coming quarters.
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· HINDUNILVR
(BSE)
ISIN: INE030A01027
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