Hindustan Unilever has declared its quarterly earnings report for Q1 FY27. Despite experiencing a drop in its share price by 3.35% to ₹2,101.95 on account of the year-over-year decline in its consolidated net profits by 3.01% to ₹2,673 crore, the FMCG major has been able to deliver exceptional performance.

This has been reflected through the 10.3% rise in the company’s revenue from operations year-on-year to ₹17,184 crore owing to 10% underlying sales growth in key Home Care, Beauty & Wellbeing, Personal Care, and Foods segments.

Operational profitability and growth trajectory

In terms of operational profitability, the quarterly profit before exceptional items and tax is up 9.29% year-over-year to ₹3,707 crore in Q1 FY27, compared with ₹3,392 crore in Q1 FY26. The company also recorded extraordinary items of ₹75 crore for the quarter. This figure included restructuring costs of ₹115 crore, partially offset by a profit of ₹45 crore on the sale of surplus assets, and acquisition and disposal-related costs of ₹5 crore. 

Earnings Before Interest, Tax, Depreciation, and Amortization rose by 8 percent on year to ₹3,947 crore. Despite the high volatility in the operating environment, the EBITDA margin narrowed by 40 basis points compared with the previous year to 23.0%, comfortably within the management’s target of 22.5% to 23.5% as they play within their current operating model. 

The underlying sales growth for the first quarter of fiscal year 2027 was 10%, along with a 5% underlying volume improvement. The business segments experienced widespread performance throughout the quarter. 

The Home Care segment experienced high single-digit underlying volume growth and an underlying sales increase of 14%. In this segment, Household Care achieved double-digit increases in both revenue and quantities sold. Vim Liquids remained strong with double-digit growth, mainly through continued penetration activities.

Hindustan Unilever delivered an underlying growth of 12% in the Beauty and Wellbeing division, driven by underlying volume growth of double digits. The Hair Care segment reported double-digit growth led by momentum in premium products and future format growth; the minimalist segment continued to grow double digits with positive momentum.

Sales growth and volatility

The Personal Care segment posted an underlying sales growth of 4%, driven mainly by pricing given climbing palm oil inflation for a 2nd year running. Skin Cleansing posted underlying growth in mid-single digits, while Premium Bars continued to grow by double digits on volume. The Oral Care segment also contributed mid-single-digit sales, helped through the premium innovations of Closeup White Now, Pepsodent Gum Care and Sensitive Care. 

The Foods segment recorded underlying sales growth of 7% and underlining volumes growth in mid-single digits. Premium Tea reported volume-led gains in the low-singles, and Coffee reported double-digit volume-led growth. Boost crossed the ₹1,000 crore annual turnover figure, and Horlicks Superfoods, among other ready-to-drink products, had healthy sales, it is noted.

In the medium term, Hindustan Unilever stated that it will track monsoon weather developments and geopolitical news moving forward, and continue to have confidence in the overall economic recovery. The firm believes the execution should be better for FY27 compared to FY26, underpinned by strategic portfolio and channel transformation efforts. 

Management indicated that the volatility in commodity prices and inflation will continue to be a major worry going ahead, and the EBITDA margin will remain in the existing range. Hindustan Unilever is one of the players in the consumer goods industry operating across various categories such as Home Care, Beauty and Personal Care, and Foods & Refreshment. It leverages its national manufacturing facilities to cater to its Indian customers.

Conclusion

Hindustan Unilever’s stock price fell by 3.35% after a revenue contraction of 10.3% in Q1 FY27. It drove net profit down by 3.01% YoY to ₹2,673 crore, despite robust topline growth. Backed by 10% underlying sales growth in its primary categories, the company continues to experience inflationary and commodity pressures as it looks to maintain long-term growth in its portfolio.