Hindustan Unilever Q3FY25 results: Net profit drops 2.76% at ₹2540 crore, revenue rises by 1.8% YoY

The FMCG conglomerate Hindustan Unilever reported muted numbers for Q3FY25. The quarter's net profit, post exceptional gains, declined by 2.7% YoY to ₹2,540 crore, compared to ₹2612 crore in the previous year's similar quarter. Pre-exceptional gain net profit stood at ₹3001 crore, up by 19% YoY.

The company reported an exceptional gain of ₹509 crore which includes acquisition and disposal gains of ₹574 crore and restructuring expenses of ₹70 crore

The quarter's total revenue growth remained muted at 1.7% YoY at ₹15,195 crore as against ₹14,928 crore. Sequentially, the revenue remained largely unchanged from ₹15,319 crore in Q2FY25. The home care and beauty & wellbeing segment reported marginal growth of 4.6% and 1.4% YoY at ₹5742 crore and ₹3,438 crore.

Muted operating profit and margins

On the operational front, the operating profit or EBITDA for the quarter jumped 2.32% YoY to ₹3,570 crore as against ₹3,540 crore in the previous quarter, a similar year, and the EBITDA margins for the quarter also dipped 20 bps to 23% in Q3FY25. This was largely due to muted revenue growth, while the key raw material expenses remained controlled.

Ice-cream business demerger

The board also approved a demerger scheme for its ice cream business, which will be listed as a separate entity. Kwality Walls Ltd will form a separate listed entity, and all the existing shareholders will receive one share of the new entity for each share held in Hindustan Unilever Ltd.

New aquisition

The company announced the acquisition of Uprising Science Private Limited, popularly known as Minimalist, at a cash consideration of ₹2,670 crore at an enterprise value of ₹2,955 crore. Post the aquisition, the company will hold 90.5% shareholding in the company. Minimalist will join the strong portfolio of brands in their Beauty & Wellbeing division.

In addition, the company also approved the acquisition of the palm undertaking of Vishwatej Oil Industries Private Limited as part of HUL’s Palm localisation strategy. Palm is a major raw material for its key beauty and homecare segment products, and it is largely imported from Indonesia and Malysia. This backward integration process is expected to achieve easy material availability and aid margins.

Shares of HUL closed flat at ₹2,340 apiece on the NSE on Wednesday and have delivered 12.38% negative returns in 2024.