HUL Q2 Earnings Preview
Hindustan Unilever Ltd (HUL) is expected to post a muted September-quarter performance, with profit likely to fall 5% YoY and sales inching up just 1%. This slowdown is attributed to GST rate cuts, extended monsoon, weak underlying demand, and channel destocking. Analysts highlight margin compression, lower other income, and temporary supply chain issues. Key product categories like soaps, shampoos, and packaged foods were particularly affected by the GST transition. While the near-term weakness for HUL’s Q2 earnings is largely transitory, a recovery is anticipated in subsequent quarters as the GST impact normalizes and demand strengthens.
The consensus among brokerages regarding HUL’s Q2 earnings preview points to a challenging quarter, primarily due to the GST rate cut impact and weak consumer demand. While most firms, like Kotak and Nuvama, project a modest 0.5-1% sales growth, Motilal Oswal is slightly more optimistic with a 2% forecast. Profit estimates show a decline, with Kotak expecting a steeper 7.6% fall in PAT compared to HSBC’s 6% and the average 5% prediction.
All analysts concur on margin pressures, driven by pricing adjustments, promotions, and volatile raw material costs, with EBITDA margins hovering around 22-22.4%. Crucially, the analysis consistently highlights the transitory nature of these headwinds, with a strong expectation for HUL’s demand recovery and improved profitability in FY26 as GST disruptions normalize and affordability boosts consumption. This outlook provides key insights for those monitoring the FMCG sector analysis and Hindustan Unilever stock performance.
| Brokerage | Sales Growth (YoY) | Profit (PAT) Change (YoY) | EBITDA Margin |
|---|---|---|---|
| Average Consensus | +1% | -5% | N/A |
| Kotak Equities | +0.5% | -7.6% | 22.1% |
| Nuvama | +1% | N/A | 22.4% |
| Motilal Oswal | +2% | N/A | N/A |
| HSBC | N/A | -6% | ~22% |
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