Hindustan Unilever shares drop 5%: Here’s what management said after Q2 earnings

The FMCG major is anticipating a low-single-digit price growth in the upcoming quarters, especially in product categories that did not benefit from the reduced GST rate, and expects a volume-led growth in the remaining second half of the fiscal year, its CFO Ritesh Tiwari said post earnings announcements.

HUL is focusing "on driving volume-led improvement and acceleration in performance in the second half of the financial year compared to the first half," he said.

"Going forward, with all the GST changes, we are not planning any further price changes for all the GST-impacted categories because we have done all the price changes. The focus now will be to stabilise this price in the market," Tiwari said in an earnings call.

He further said of the total portfolio, 40% is impacted by GST, "but there is... 60 per cent business, which sits (with) no impact of GST."

"Now we will see where commodities are trending. As of now, the commodity is benign, which is why we called out that we anticipate low single-digit price growth going forward," Tiwari said.

HUL’s Q2 earnings

Hindustan Unilever reported a 3.6% increase in its consolidated net profit at ₹2,685 crore for the quarter ended September 30 of fiscal year 2025-26 as compared to ₹2,591 crore in the same quarter of the previous fiscal year.

The company’s revenue from operation stood at ₹16,034 crore in Q2 FY26 in contrast to ₹15,703 crore in the corresponding quarter of last year, marking a growth of 2.1%.

On the operation level, HUL’s earnings before interest, taxes, depreciation, and amortisation (EBITDA) marginally declined by 1.3% at ₹3,522 crore in the reporting quarter as against ₹3,570 crore in Q2 FY25. The margin, however, contracted to 21.97% in Q2 FY26 in contrast to 22.73% YoY.

The FMCG firm has also announced an interim dividend of ₹19 per equity share of face value of ₹1 each for FY26. The record date to determine shareholders eligible for the interim dividend has been set for November 7, 2025, and the dividend will be paid on November 20, 2025, HUL said.

HUL reported that its profit after tax grew mainly due to a one-off gain from the resolution of prior years’ tax matters between UK and Indian tax authorities. Quarterly performance was impacted by temporary GST changes and extended monsoon conditions in some regions. EBITDA margins declined amid higher business investments.

For the first half of the current financial year (H1 FY26), HUL’s net profit surged 4.6% to ₹5,441 crore from ₹5,201 crore year-on-year (YoY). Its revenue for H1 FY26 stood at ₹32,330 crore as against ₹31,200 crore, marking a growth of 3.62% YoY.

HUL share price

On Friday, shares of HUL were trading at ₹2,510 apiece on NSE, down 3.52% at 10:20 AM. It was one of the top laggards on the NIFTY50 index.

Over the past five trading sessions, shares of the company have lost 4%, while they have fallen 2% in a month. In the past six months, the stock rose 8%.

Shares of HUL hit a 52-week high of ₹2,750 on September 4, 2025, and a 52-week low of ₹2,136 on March 4, 2025. It's market capitalisation stood at ₹5.88 lakh crore.

Here is what analysts said…

Analysts at Goldman Sachs anticipate a growth recovery in the second half of the current fiscal year, though at a more moderate pace. The brokerage added that under its new CEO, Priya Nair, HUL is focusing on driving volume-led revenue growth going forward.

CLSA noted that the FMCG major remains committed to portfolio renovation and volume-driven growth. It highlighted a strong performance in the beauty segment, particularly in skincare, while personal care volumes saw a decline.

Meanwhile, Morgan Stanley expects the trade pipeline to normalise to the usual four-to-six-week range over the next few months and said that demand remains stable across both rural and urban markets.