Hindustan Unilever (HINDUNILVR) Q3 24/25 earnings summary

Executive summary

• FMCG volume growth slowed, with urban moderation and gradual rural recovery; small packs saw increased growth due to macroeconomic pressures.

• Premiumization trend remains resilient, with premium segments outpacing mass segments; company continues to invest in innovation and brand building.

• Underlying Sales Growth (USG) rose 2% year-over-year, with flat Underlying Volume Growth (UVG); absolute volume grew but was offset by negative mix.

• Strategic actions included divestment of the water business, separation of the ice cream business, and acquisition of a majority stake in Minimalist, a premium beauty brand.

• EBITDA margin remained healthy at 23.5%; Profit After Tax (PAT) grew 19% year-over-year, mainly due to the Pureit divestment, while PAT before exceptional items was flat.

Financial highlights

• Turnover for the quarter was INR 15,195 crores, with underlying sales growth of 2% led by pricing; underlying volume growth was flat.

• EBITDA stood at Rs. 3,570 crore, with a margin of 23.5% (down 20 bps year-over-year).

• PAT reached Rs. 3,001 crore, up 19% year-over-year, driven by exceptional items; PAT before exceptional items was flat.

• For the nine months of FY'25, turnover grew 2% to Rs. 45,680 crore, EBITDA margin was 23.7% (down 30 bps), and net profit grew 6%.

• Earnings per share (EPS) for the quarter stood at Rs. 12.70, compared to Rs. 10.68 in the prior year.

Outlook and guidance

• Demand moderation is expected to continue in the near term, with focus on driving competitive volume-led growth and portfolio transformation.

• Investments will be prioritized across core, future core, and market maker portfolios; ice cream de-merger and Minimalist acquisition to be executed as per timelines.

• If commodity prices remain stable, low single-digit price growth is expected; EBITDA margin to be maintained at the lower end of the 23%-24% range.

• The Board approved the demerger of the Ice Cream business into a new listed entity, Kwality Wall's (India) Limited, subject to regulatory approvals.

• Acquisition of 90.5% stake in Minimalist was approved, with the balance to be acquired as per agreement terms.