HUL impresses the Street with 4% volume growth in Q1; shares rally 4%; check top highlights

Shares of Hindustan Unilever jumped over 3.5% on Thursday morning after the company announced its Q1FY26 results. The company jumped 6% YoY to ₹2,768 crore on a consolidated basis. This came on the back of strong topline growth bolstered by 5% standalone volume growth. The topline or gross sales for the quarter jumped 5% YoY to ₹16,323 crore as compared to ₹15,523 crore in the same period last year.

Key highlights from Q1FY26

Strong volume growth

The topline growth of 5% YoY was largely boosted by 4% underlying volume growth. It is also one of the fastest volume growth in over two year period, highlighting the impact of macro environment in the economy. The volume growth was largely driven by high-single digit volume growth in home care segment which is the major revenue contributor at ₹5,777 crore, which grew 4% YoY. The other key segments like Beauty & Well being, Personal care and Foods also witnessed 5-7% sales growth during the quarter.

Margins contraction

Despite the better than expected sales growth and volume growth the EBITDA (Earnings before Interest, Taxes ,Depriciation & Ammortisatin) remained muted at ₹3,718 crore as compared to ₹3,744 crore in the previous year’s similar quarter. In addition, the EBITDA margin for the quarter contracted by 130 bps to 22.8% from 24.1% in the previous year’s similar quarter. The margin contraction was primarily driven by wide gap in material price inflation and price increase. The company expects margins to stablise in coming quarters.

Outlook remains positive

The company expects H1FY26 to be better than H1FY25 due to portfolio transformations and improving macroeconomic conditions. The company further expects margins to improve sequentially due to more visible impact of price rise in coming quarters. The consolidated EBITDA margins to remain in the range 22-23%.

Rural outperformed Urban growth

The rural growth remained strong across the segments as compared to the urban FMCG volume growth. The trend is consistent for few quarters and expected to remain intact for coming quarters as well. Above normal monsoon and better agricultural yeilds will remain major trigger to the coming quarters volume growth. The tax relief and interest rate cuts are expected to show impact with a lag and aid the urban volume growth in the later half of the year.

Management Commentary

Commenting on the Q1FY26 results, Rohit Jawa, CEO and Managing Director, said,” FMCG demand has continued to remain stable, with a gradual uptick inrecency. Encouraged by favourable macro-economic indicators, we strategically stepped up our investments to effectively advance our portfolio transformation agenda in this quarter. As a result, we delivered competitive, broad-based growth with an Underlying Sales Growth of 5%, driven by an Underlying Volume Growth of 4%, at a consolidated level. Going forward, I expect this gradual recovery to be sustained. I am confident that the ASPIRE strategy will further strengthen our presence in segments and channels of the future, powered by unmissably superior brands, heightened innovation intensity and digital media models, to deliver competitive volume-led growth and create long-term shareholder value.”