Hindustan Unilever Limited , India's leading fast-moving consumer goods company, reported its Q4 earnings in line with estimates, showing a mixed performance with volume growth offset by margin pressure amid a challenging operating environment.

Q4 Performance Highlights

HUL's key highlights for Q4 include:

• Total sales grew by 2.00% year-on-year, driven by an underlying volume growth of 2.00%
• Rural growth outpaced urban growth, indicating a positive trend in rural markets
• Near-term operating margin guidance was revised down to 22.00-23.00% from the previous 23.00-24.00%

Margin Guidance and Growth Strategy

HUL's decision to revise its operating margin guidance downward signals an increased focus on marketing spend to drive growth. This move is viewed by analysts as an aggressive growth strategy, despite the potential for near-term margin compression. The company aims to balance profitability with investments in future growth.

Pricing and Commodity Outlook

HUL expects low single-digit price hikes in the near future, as commodity prices remain relatively stable. This measured approach to pricing reflects the company's efforts to maintain its competitive position while managing input costs.

Segment-wise Performance

Home Care

Delivered mid-single digit volume growth, with strong performance in premium fabric wash and fabric conditioners. The liquids portfolio continued to show strong double-digit volume growth.

Beauty & Wellbeing

Reported low-single digit volume growth. Hair Care saw double-digit growth, while Skin Care and Color Cosmetics experienced a low-single digit decline.

Personal Care

Witnessed a low-single digit volume decline. Skin Cleansing saw low-single digit price-led growth, with the non-hygiene segment showing positive momentum.

Foods

Experienced mid-single digit volume decline. Tea delivered low-single digit growth, while Nutrition Drinks turnover declined due to category headwinds and transitionary impact of pack-price architecture changes.

Future Outlook

Looking ahead, HUL anticipates:

• Gradual improvement in demand conditions over the next fiscal year
• Increased investments to support portfolio transformation in high-growth demand spaces
• EBITDA margin to be maintained within the revised range of 22.00-23.00%
• Continued focus on driving volume-led competitive growth

As HUL navigates through a challenging operating environment, the company's emphasis on volume growth, strategic investments, and portfolio transformation positions it to capitalize on the gradual recovery expected in the coming fiscal year.

Hindustan Unilever Limited (HUL), India's leading fast-moving consumer goods company, has reported a steady performance for the fourth quarter and full fiscal year 2024-25, demonstrating resilience in a challenging market environment.

Q4 FY2025 Highlights

• Revenue from operations grew by 2% to Rs. 15,000.00 crores
• Underlying Sales Growth (USG) of 3% with Underlying Volume Growth (UVG) of 2%
• EBITDA margin at 23.10%, a slight decline of 30 basis points year-on-year
• Profit After Tax (PAT) increased by 4% to Rs. 2,493.00 crores

Segment Performance

HUL's performance across its business segments for Q4 FY2025 was mixed:

• Home Care: Delivered 3% USG driven by mid-single digit UVG
• Beauty & Wellbeing: Grew by 3% with low-single digit UVG
• Personal Care: Reported 3% growth with low-single digit volume decline
• Foods: Turnover declined by 1% with low-single digit price growth offset by volume decline

Full Year FY2025 Results

For the fiscal year 2024-25, HUL reported:

• Total sales growth of 2% to Rs. 60,680.00 crores
• EBITDA growth of 1% to Rs. 14,289.00 crores
• Profit After Tax growth of 5% to Rs. 10,644.00 crores

Dividend Announcement

The Board of Directors has recommended a final dividend of Rs. 24.00 per share for FY2025. This, combined with the interim dividend of Rs. 19.00 per share and special dividend of Rs. 10.00 per share paid in November 2024, brings the total dividend for FY2025 to Rs. 53.00 per share.

Management Commentary

Rohit Jawa, CEO and Managing Director of HUL, commented on the results: "In FY'25, our turnover surpassed Rs. 60,000 Crores, with an Underlying Sales Growth of 2% and an EPS growth of 5%. While absolute volume tonnage grew in mid-single digit, it was partially offset by a negative mix. We delivered a competitive performance, further strengthening our market leadership during the year."

He added, "This year marked a step up in our portfolio transformation with increased innovation in high-growth spaces, amplified investments in channels of the future, acquisition of Minimalist, divestment of Pureit, and the decision to demerge Ice Cream business."

Future Outlook

Looking ahead, HUL anticipates demand conditions to gradually improve over the next fiscal year. The company remains committed to its strategic objective of unlocking a billion aspirations, supported by robust business fundamentals, to continue winning competitively.

Key Financial Metrics

HUL's performance in Q4 and FY2025 reflects its ability to navigate challenging market conditions while maintaining growth. The company's focus on portfolio transformation and strategic initiatives positions it well for future growth as market conditions improve.