HUL Receives ₹1,559.69 Crore Income Tax Demand for FY22, Reports Q2 Profit Growth
Hindustan Unilever received an income tax assessment order of ₹1,559.69 crore for FY22 related to transfer pricing adjustments, but stated it will have no material business impact and plans to appeal. The company reported Q2 net profit growth of 3.8% to ₹2,694 crore and revenue increase of 2.1% to ₹16,034 crore, though EBITDA margin declined to 23.2% due to higher investments and flat volume growth from GST changes and monsoon conditions.
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Hindustan Unilever has received a significant income tax assessment order while simultaneously reporting steady quarterly growth, highlighting the company's resilience amid regulatory challenges.
Tax Assessment Order Details
The FMCG major received an income tax assessment order demanding ₹1,559.69 crore for the financial year 2021-22 (assessment year 2022-23). The notice was issued on January 7, 2026, by the Assistant Commissioner of Income Tax, Central Circle 5(2), Mumbai.
| Parameter: | Details |
|---|---|
| Assessment Amount: | ₹1,559.69 crore |
| Financial Year: | 2021-22 |
| Assessment Year: | 2022-23 |
| Issue Date: | January 7, 2026 |
| Primary Concerns: | Transfer pricing adjustments and corporate tax disallowances |
HUL emphasized that the assessment order will have "no material impact on the financials, operations or other activities of the company." The company plans to file the necessary appeal with the appropriate appellate authority within the prescribed timeline and clarified that no penalties, sanctions, or restrictions have been imposed under the order.
Q2 Financial Performance
Despite the tax matter, Hindustan Unilever demonstrated solid financial performance in the quarter ended September 30, 2025. The company reported consolidated net profit growth of 3.8% year-on-year, reaching ₹2,694 crore compared to ₹2,595 crore in the same period last year.
| Financial Metric: | Q2 2025 | Q2 2024 | Change (%) |
|---|---|---|---|
| Net Profit: | ₹2,694 crore | ₹2,595 crore | +3.8% |
| Revenue from Operations: | ₹16,034 crore | ₹15,703 crore | +2.1% |
| Total Income: | ₹16,388 crore | ₹16,148 crore | +1.5% |
| EBITDA Margin: | 23.2% | 24.1% | -90 bps |
| Total Expenses: | ₹12,999 crore | ₹12,582 crore | +3.32% |
Operational Challenges and Margin Pressure
The company faced operational headwinds during the quarter, reporting "flat underlying volume growth" due to the transitory impact of GST changes and prolonged monsoon conditions in parts of the country. HUL achieved a consolidated Underlying Sales Growth (USG) of 2% and flat Underlying Volume Growth (UVG) in the September quarter of 2025.
EBITDA margin declined to 23.2%, down 90 basis points year-on-year, as the company increased investments in the business. Higher spending weighed on margins during the period, reflecting HUL's strategic focus on long-term growth initiatives.
Mixed Profitability Indicators
Profit before exceptional items and tax declined 4.8% to ₹3,386 crore in Q2 FY26, compared with ₹3,558 crore in the year-ago period. However, profit after tax rose 4%, primarily driven by a one-off positive impact of ₹184 crore pursuant to resolution of prior years' tax matters between UK and Indian tax authorities.
Market Response
Shares of Hindustan Unilever ended the trading day at ₹2,389.70 on the BSE, down ₹9.70 or 0.40%. The company, which owns popular brands such as Rin, Surf Excel, Lux, and Horlicks, continues to navigate challenging market conditions while maintaining its market position in the FMCG sector.
Historical Stock Returns for Hindustan Unilever
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| +0.51% | +0.83% | +6.41% | -0.93% | +5.17% | +4.37% |
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