Hindustan Unilever (HINDUNILVR) Q1 24/25 earnings summary

Executive summary

• Revenue for the June 2024 quarter was INR 15,166 crore, up 2% year-over-year, with underlying volume growth of 4% and underlying sales growth of 2–4%, impacted by negative pricing as lower commodity costs were passed to consumers.

• Net profit stood at INR 2,538 crore, up 3% year-over-year, and operating margin improved to 23.8%, up 20 basis points year-over-year.

• Gross margin rose to 50.9%, up 170 basis points versus Q1 2023, driven by operational excellence and premiumization.

• Premium segments and e-commerce continue to outperform, with premium portfolio contribution up 300 basis points over three years and e-commerce growing at 50%.

• Continued investment in brands, with A&P spend at 10.8% of sales, up 90 bps year-over-year.

Financial highlights

• EBITDA stood at INR 3,606 crore, up 2% year-over-year, with a margin of 23.8% (up 20 bps); profit after tax before exceptional items was INR 2,572 crore, up 3%.

• Effective tax rate for the quarter was 26.1%.

• EPS grew 3% compared to JQ'23.

• Value-weighted distribution exceeded 95%, with over 75% of business showing stable or gaining brand power.

• Exceptional items amounted to a net expense of INR 48 crore.

Outlook and guidance

• FMCG and rural demand are expected to improve gradually, supported by forecasts of above-normal monsoon and better crop realization.

• Intrinsic price growth is expected to be near zero in the short term, with low single-digit positive pricing by year-end if commodity prices remain stable.

• EBITDA margins are expected to remain at current levels, with a focus on competitive, volume-led growth.

• Continued investment in brands and strategic priorities, maintaining cost discipline through productivity programs.