One of India’s largest consumer staples firm Hindustan Unilever Ltd. is set to report its earnings for the second quarter of the current fiscal year on October 23, 2025. The recent Goods and Services tax (GST) rationalisation will impact the sales for the period, the FMCG player had noted.
According to a Moneycontrol poll of seven brokerages, Hindustan Unilever is likely to report revenue growth in low single-digits, higher by almost 2 percent on-year, at Rs 15,784 crore, as against Rs 15,508 crore in the September quarter of the previous year. Net profit is likely to come in at Rs 2,500 crore, down 4.3 percent from Rs 2,611 crore from the corresponding quarter last year.
Earnings estimates of analysts polled by Moneycontrol are in a diverse range. The most optimistic estimate sees HUL’s net profit rising 4.2 percent on-year, but the most pessimistic projection, rolled out by Systematix Institutional Research, suggests that net profit might fall 11 percent YoY.
What factors are impacting the earnings?
GST impact: HUL has noted that the GST move has resulted in postponement of ordering in anticipation of receiving new stocks with updated prices and lower orders across the overall portfolio as consumers delayed their pantry buying.
The firm expects to witness flat to low single-digit revenue growth, impacted due to the transitionary impact of GST, which led to disruption across channels in September, management highlighted that disruption is likely to continue till October and is expected to normalize starting November.
Margins: Brokerages expect the EBITDA margin to contract between 100 to 140 basis points, after factoring in 10 bps increase in royalty, adverse operating leverage due to channel de-stocking and higher promotions to support the channel inventory liquidation. Further, estimates peg A&P spends to be at 9.55 percent of sales, higher by 10 basis points YoY.
Segment performance: Kotak Institutional Equities expects Hindustan Unilever’s (HUL) volume and sales growth to remain flat to up 0.5 percent in the second quarter, impacted temporarily by the GST rate cuts. Segment-wise, it projects:
- Home Care growth of 3.8 percent year-on-year (vs. 1.9 percent in Q1)
- Beauty and Personal Care decline of 2 percent (vs. +5.5 percent in Q1)
- Foods and Refreshment decline of 1 percent (vs. +4.3 percent in Q1)
What to look out for in the quarterly show?
The key focus will be on HUL’s growth outlook, and experts will be watching closely for commentary on inflation and pricing outlook in both soaps and tea. Additionally, demand recovery in urban consumption will be eyed. Any commentary on the impact of GST rationalisation will also be watched out for.
