Hind. Unilever Q2 FY27 Results (NSE: HINDUNILVR)
Signal: Margin pressure
The read
The trajectory improved sharply on volume: turnover growth accelerated to 15% from 10.1% in Q1FY27 and USG reached a 14-quarter high, with 7% UVG supporting broad-based segment growth. However, EBITDA margin fell 140bps to 22.6% and calculated gross margin compressed to about 47.0%, so the key question is whether volume-led growth can be retained without further cost absorption; underlying PAT grew 9% while reported PAT was flat because of the ₹273 Cr prior-year tax gain.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹18,037 Cr | +15% | +5% |
| Net profit | ₹2,796 Cr | +0% | |
| EPS | ₹11.87 | +0.3% | |
| EBIT margin | 22.6% |
P&L walk
Revenue from operations rose to ₹18,037 Cr, +15% YoY and +5% sequentially, led by 7% volume growth; calculated gross margin compressed to about 47.0% as material and purchase costs rose, EBITDA grew 8% to ₹4,089 Cr while margin fell 140bps to 22.6%, and PAT was flat at ₹2,796 Cr because the prior-year quarter contained a ₹273 Cr tax-related exceptional gain.
Segments
Home care was the main volume and profit engine, with ₹6,878 Cr revenue and ₹1,111 Cr segment result, while Beauty & wellbeing delivered the highest segment result at ₹1,235 Cr on ₹4,319 Cr revenue; Foods also contributed ₹834 Cr on ₹3,849 Cr revenue.
Key positives
- Turnover was ₹18,071 Cr, +15% YoY, the strongest underlying sales growth in 14 quarters, with 7% UVG showing that momentum was not solely price-led.
- Home care delivered 22% USG with double-digit UVG, while Beauty & wellbeing delivered 16% USG with double-digit UVG, providing broad-based growth across major categories.
- EBITDA grew 8% to ₹4,089 Cr and PAT before exceptional items grew 9% to ₹2,795 Cr despite the margin decline.
- H1 operating cash flow increased to ₹8,022 Cr from ₹6,267 Cr, a 28% YoY improvement.
Key concerns
- EBITDA margin declined 140bps YoY to 22.6%, while calculated gross margin compressed to about 47.0% as material and stock-in-trade costs increased faster than revenue.
- Employee benefits expense rose 17.5% YoY to ₹852 Cr, faster than revenue growth of 15%, adding to operating-cost intensity.
- Reported PAT of ₹2,796 Cr was flat because the base quarter benefited from a ₹273 Cr one-off tax-related gain, making headline profit growth materially weaker than underlying PAT growth.
Research and educational content only. Not investment advice.