HUL Q3 Results: Profit Soars, But What About Margins?

Hindustan Unilever Ltd (HUL) reported a 19% year-on-year increase in net profit for Q3 FY25, reaching ₹3,001 crore, which exceeded market expectations. Revenue grew by 1% to ₹15,408 crore, demonstrating resilience amidst challenging market conditions. Earnings before interest, taxes, depreciation, and amortisation (EBITDA) increased to ₹3,570 crore, maintaining an EBITDA margin of 23.15%.

The company successfully managed input cost inflation through a combination of cost-saving measures and price increases. However, gross non-performing assets slightly worsened to 1.42%, with net non-performing assets at 0.46%, indicating some asset quality challenges.

HUL’s home care and beauty & personal care segments contributed significantly to the revenue growth, driven by increased consumer demand and new product launches. However, the foods & refreshment segment faced headwinds due to higher raw material costs and lower-than-expected consumer demand.

Efforts to streamline operations and enhance digital capabilities paid off, as reflected in the better-than-expected financial performance. The company declared an interim dividend of ₹2.05 per share, with January 30 set as the record date. Investors appreciated HUL’s robust performance and continued focus on innovation and sustainability.

Analysts recommend HUL as a strong investment option, emphasizing its solid fundamentals and market leadership amidst macroeconomic fluctuations.