Hindustan Unilever Limited (HUL) has received a substantial income tax assessment order, marking a significant development for the leading FMCG company. The company disclosed this information through an exchange filing on Thursday, ensuring transparency with its stakeholders.

Tax Assessment Details

The income tax assessment order pertains to the financial year 2021-22, corresponding to assessment year 2022-23. The substantial amount involved highlights the scale of the tax matter facing the consumer goods giant.

Company Disclosure

HUL made the disclosure through proper regulatory channels via an exchange filing, adhering to its compliance obligations. The company's prompt disclosure demonstrates its commitment to maintaining transparency with investors and regulatory authorities regarding material developments that could impact its financial position.

This tax assessment represents a significant financial matter for HUL, one of India's largest consumer goods companies. The disclosure through exchange filing ensures that all stakeholders are informed about this development in a timely manner, allowing them to assess its potential implications on the company's operations and financial standing.

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.

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.

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.