HUL Q4FY25 Results: Sales up 2%, margins guided lower

What HUL reported in Q4FY25

Hindustan Unilever Ltd (HUL) reported its Q4FY25 performance broadly in line with estimates, as volume-led growth continued but margins faced pressure from key input costs. The company reported underlying sales growth (USG) of 3% for the quarter, supported by underlying volume growth (UVG) of 2%. Reported sales growth for the quarter was around 2% year-on-year in the published summaries. Management commentary pointed to rural growth outpacing urban demand, with a rise in small-pack sales reflecting greater traction in value packs.

A key change in the update was a revision to near-term operating margin guidance. HUL revised its operating (EBITDA) margin guidance to 22% to 23%, from the earlier 23% to 24% range. The quarter showed the continued impact of competitive pricing moves in some categories and cost inflation in select commodities.

Full-year FY25 snapshot and pricing stance

For FY25, HUL reported turnover of ₹60,680 crore, with underlying sales growth of 2% and underlying volume growth of 2%. Management said absolute volume tonnage grew in the mid-single digits, but negative mix reduced reported UVG to 2% for the year.

On pricing, the company linked actions to net material inflation (NMI). For FY25, NMI was described as flat, with inflation in some parts of the portfolio offset by buying efficiencies, savings, and deflation in other areas. As a result, underlying price growth for the year was near 0.

Margins: gross margin down, EBITDA steady but pressured

HUL’s gross margin in Q4FY25 was reported at 49.8%, down about 156 to 160 basis points year-on-year, as commodity costs rose in areas such as tea, coffee, and palm oil. EBITDA for the quarter was reported at ₹3,466 crore, up 0.9% year-on-year, while EBITDA margin was reported at 22.8% in one brokerage summary and 23.1% in another quarter highlight, indicating a slight year-on-year contraction.

The quarter also saw lower advertising and promotion intensity in at least one summary, which noted ad spends fell 8.3% year-on-year. That reduction partly offset gross margin pressure but did not prevent margin guidance from being revised down.

Profit: reported PAT lifted by Pureit divestment

For Q4FY25, reported profit after tax (PAT) was ₹2,493 crore. One summary attributed a 19% year-on-year rise in reported PAT to profit from the divestment of the “Pureit” business, while another summary described PAT as up 4% year-on-year to the same ₹2,493 crore. An adjusted PAT figure of ₹2,497 crore was also cited, up 4.2% year-on-year.

These differences reflect the way various summaries and broker notes present “reported” versus “adjusted” profit, and whether exceptional gains are included.

Segment check: Home Care remains the volume engine

Home Care was again highlighted as the strongest contributor on volumes. The segment delivered 3% underlying sales growth, driven by mid-single-digit volume gains, while pricing stayed negative due to commodity-led price reductions passed on to consumers.

Within Home Care, Fabric Wash volumes grew in the mid-single digits, led by outperformance in Surf Excel and Comfort. The liquids portfolio recorded double-digit volume growth in Fabric Wash in the segment commentary. Household Care volumes rose in high-single digits, supported by liquids performance and early traction from new launches.

Beauty, Personal Care and Foods: mixed trends

Beauty and Wellbeing reported low-single-digit volume growth, with hair care described as delivering double-digit growth. Skin care and color cosmetics were noted as seeing a low-single-digit decline.

Personal Care saw a low-single-digit volume decline. Skin cleansing delivered low-single-digit price-led growth, with the non-hygiene segment described as showing positive momentum in the quarter update.

Foods experienced pressure, with mid-single-digit volume decline mentioned in one segment summary. Tea delivered low-single-digit growth, while Nutrition Drinks turnover declined due to category headwinds and the transitionary impact of pack-price architecture changes. Another quarter segment summary stated Foods turnover declined 1%, with low-single-digit price growth offset by volume decline.

Outlook for FY26: H1 expected better than H2FY25

Management expects growth trends to gradually improve, supported by accelerated portfolio transformation actions and improving macro conditions. The commentary cited potential support from monetary stimulus, tax relief, lower food inflation, and higher agriculture output. In this context, HUL expects the first half of FY26 to be better than the second half of FY25.

On pricing, the company indicated that if commodities remain where they are, it expects price growth to be in the low single-digit range. It also noted that calibrated price increases in skin cleansing and beverages were largely offset by price reductions in Home Care during the period.

Dividend and stock move snapshot

HUL announced a final dividend of ₹24 per share for FY25. Along with an interim dividend of ₹19 per share and a special dividend of ₹10 per share paid in November 2024, the total FY25 dividend was reported at ₹53 per share.

The article snapshot also carried short-term and long-term stock return figures: 1 day +1.60%, 5 days -4.17%, 1 month -11.10%, 6 months -15.96%, 1 year -6.05%, and 5 years -9.31%.

Key numbers mentioned across updates

Why the quarter matters for investors

The quarter reinforced two running themes for large FMCG companies: demand remains uneven, and input costs can quickly reshape margin expectations. HUL’s 2% UVG in Q4FY25 and the emphasis on rural outpacing urban show that volume recovery is present but still gradual.

At the same time, the 49.8% gross margin and the revision in margin guidance to 22% to 23% highlight the sensitivity to commodities such as tea, coffee, and palm oil. The company’s approach of passing on commodity relief in categories like Home Care supports competitiveness, but it can keep price growth muted when inflation is not broad-based.

Conclusion

HUL closed Q4FY25 with modest reported sales growth and steady underlying volumes, while margin pressure and competitive price actions shaped profitability and guidance. Management expects demand conditions to gradually improve and expects the first half of FY26 to be better than the second half of FY25, with low single-digit price growth if commodity levels remain stable.