Hindustan Unilever shares tumble over 6% post Q2 results

• FMCG giant HUL’s shares reported a decline of over 6% on Thursday.
• This comes a day after the company reported a 2.33% decline in consolidated net profit in Q2.
• The stock tanked 6.59% to ₹2,483.95 on the NSE.

Shares of FMCG major Hindustan Unilever Ltd (HUL) on Thursday tumbled over 6% after the firm reported a 2.33% decline in consolidated net profit for the second quarter ended in September. The stock tanked 6.59% to ₹2,483.95 on the NSE.

The stock emerged as the biggest laggard among the Sensex and Nifty firms during the morning trade.

Hindustan Unilever Ltd on Wednesday reported a 2.33% decline in consolidated net profit at ₹2,595 crore for the second quarter ended in September 2024, impacted by moderation in demand from the urban market.

The company had logged a net profit of ₹2,657 crore in the July-September quarter a year ago, HUL said in a regulatory filing.

However, revenue from product sales was up 2.36% at ₹15,703 crore in the September quarter, from ₹15,340 crore in the year-ago period, HUL which owns power brands such as Surf, Rin, Lux, Pond's, Lifebuoy, Lakme, Brooke Bond, Lipton and Horlicks said.

"In the September quarter, FMCG demand witnessed moderating growth in urban markets, while rural continued to recover gradually. In this context, we delivered a competitive and profitable performance," HUL CEO and Managing Director Rohit Jawa said.

HUL reported an underlying sales growth of 2% and underlying volume growth of 3%. Total expenses were at ₹12,581 crore in the September quarter, up 3.03% year-on-year.

HUL's total income, which includes other income, was up 2.14% to ₹16,145 crore in the September quarter of FY25.

Addressing an earnings call, HUL CFO Ritesh Tiwari said, "Two thirds of our business we do in urban areas, and one-third we do in rural areas … we are seeing growth in the urban market moderating. We are seeing rural growth recovery is gradual … it impacts all the categories that we have."

On the outlook, he said, "In the near term, we expect demand trends to be stable with no further acceleration in pace of growth."

In this context, Tiwari said, "Our focus remains on driving competitive volume-led growth, while continuing investments behind our brands and strategy priorities … If commodity prices remain where they are, we expect a low single digit price growth in the near-term."

With inputs from PTI.

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