Mumbai: Hindustan Unilever Limited (HUL), one of India’s largest fast-moving consumer goods (FMCG) companies, faced a mixed financial performance for the quarter ending September 2024 (Q2 FY2025). While the company managed to maintain a stable revenue flow, posting a modest 2 per cent year-on-year growth, its profit after tax (PAT) took a hit, declining by 4 per cent compared to the same quarter last year. This marked a challenging period for the consumer giant as rising input costs and sluggish consumer demand weighed down its profitability.

The financial results released on 23 October 2024, indicate that HUL’s revenue from operations stood at Rs 15,319 crores, up from Rs 15,027 crores in Q2 FY2024. However, the company’s Earnings Before Interest, Taxes, Depreciation, and Amortisation (EBITDA) margins saw a slight contraction. EBITDA for the quarter came in at Rs 3,647 crores, marking an 80 basis points (bps) decline to 23.8 per cent from 24.6 per cent in the same period last year.

A key highlight from the results was the dip in PAT to Rs 2,612 crores, down from Rs 2,717 crores in Q2 FY2024, representing a 4 per cent decline. This drop was driven by multiple factors, including escalating material costs and competitive pricing pressures in key segments like personal care and home care. Additionally, the company faced an exceptional restructuring charge of Rs 16 crores during the quarter, further compressing net earnings.

HUL’s executive director and company secretary, Dev Bajpai, commented on the results, stating: “While we continue to deliver on our commitment to revenue growth, profitability challenges are real. We are focused on operational efficiencies and agile strategies to navigate the cost pressures.”

The company’s Home Care division reported a sales increase to Rs 5,737 crores, while Beauty & Wellbeing achieved sales of Rs 3,323 crores. Yet, Personal Care and Foods & Refreshment segments faced marginal declines, with Personal Care revenue dropping to Rs 2,412 crores.

In a bid to reward shareholders, HUL declared an interim dividend of Rs 19 per equity share and a special dividend of Rs 10 per share for FY2025, totalling Rs 29 per equity share. The record date for the dividend is set for 6 November 2024, with the dividend payout scheduled for 21 November 2024. Despite the decline in PAT, HUL’s strong cash flow allowed it to maintain its dividend policy, signalling confidence in its long-term growth strategy.

The FMCG giant remains cautiously optimistic about the future. The company continues to emphasise innovation, digital transformation, and a consumer-centric approach to fuel long-term growth. Commenting on the company’s outlook, MD & CEO Rohit Jawa said: “Our investments in innovation and sustainability are non-negotiable as we focus on both protecting margins and driving top-line growth in the challenging macroeconomic environment.”

Looking forward, HUL’s ability to manage costs and drive sales growth in a competitive market will be crucial. With consumer preferences shifting and economic pressures persisting, the company must stay agile and innovate to regain momentum in the upcoming quarters.