Hindustan Unilever (HINDUNILVR) Q3 24/25 earnings summary

Executive summary

• Underlying sales growth for the quarter ended December 2024 was 2%, led by pricing, with flat volume growth amid subdued FMCG demand and a shift to smaller pack sizes due to macroeconomic pressures.

• Gross margin stood at 50%, and EBITDA margin was maintained at 23.5%-23.7%, within the 23%-24% target range, despite commodity inflation and adverse mix.

• PAT before exceptional items was flat year-on-year at ₹2,540 crores, while reported PAT grew 19% to ₹3,001 crores, driven by profit from the Pureit business divestment.

• The company completed the divestment of Pureit, announced the acquisition of a 90.5% stake in Minimalist, and approved the demerger of the ice cream business.

• The company continues to gain turnover-weighted market share and reports over 80% of turnover as 'unmissably superior' versus competition.

Financial highlights

• Turnover for the quarter was ₹15,195 crores, with underlying sales growth of 2% and flat underlying volume growth.

• EBITDA stood at ₹3,570 crores, with a margin of 23.5% (down 20 bps year-on-year); for the nine months, EBITDA margin was 23.7%.

• PAT before exceptional items was ₹2,540 crores (flat YoY); reported PAT was ₹3,001 crores, up 19% YoY due to Pureit divestment gains.

• EPS grew 19% YoY, reflecting the one-time gain from the Pureit sale.

• For the nine months, turnover reached ₹45,680 crores, with gross margin at 50.4% and EBITDA at 23.7%.

Outlook and guidance

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

• Investments will be prioritized across core, future core, and market maker portfolios to maximize growth.

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

• The negative mix from small pack growth is seen as transitory and expected to self-correct in coming quarters.

• Ongoing execution of announced M&A and ice-cream demerger activities.