HUL’s profit growth outpaced sales as margins improved, but stock fell
Costs grew slower than revenue and operating margin rose 0.39 percentage points YoY, although other income and a lower tax rate supported profit growth.
Filed 30 Apr 2026, 10:28 IST · Hindustan Unilever Ltd (HINDUNILVR)
Key takeaways
- Consolidated revenue grew +4.35% YoY while expenses rose +3.81%, lifting operating profit +6.13%.
- Net profit rose +20.97% YoY, helped by a tax rate that fell 2.88 percentage points and other income equal to 12.92% of pre-tax profit.
- The stock fell -2.74% on the results day, larger than its 1.78% median absolute post-results move across eight quarters.
Price around the results
Revenue growth translated into a larger operating gain
Hindustan Unilever’s consolidated revenue grew +4.35% YoY in Q4FY26, while expenses increased +3.81%. The slower cost growth lifted operating profit by +6.13%, ahead of sales growth. Sequentially, revenue declined -0.55%, but operating profit increased +1.40% as expenses fell -1.13%.
Margin improved, but profit quality needs attention
Operating margin expanded 0.39 percentage points YoY and 0.45 percentage points QoQ because costs grew slower than revenue in both comparisons. Net profit growth of +20.97% was much faster than operating-profit growth, with other income up +198.24% YoY and accounting for 12.92% of pre-tax profit. The tax rate also fell 2.88 percentage points YoY, providing an additional lift to net profit.
A third straight quarterly margin increase keeps HUL above peers
Operating margin rose in each quarter from Q1FY26 through Q4FY26, reaching 23.49% in the latest quarter. HUL’s margin was 6.74 percentage points above the 16.75% median for the 26 FMCG peers that had reported the same quarter. The sequential sales decline shows that the margin improvement came from cost control rather than revenue momentum.
Management links the next phase to portfolio and channel changes
Management said it expects FY27 to be better than FY26, led by portfolio and channel transformation, and said consolidated EBITDA margin should remain around its current guided range. The company said investments in market development, channel expansion and portfolio transformation are being scaled. It also reported +14% underlying sales growth in Home Care, its highest growth in three years, while flagging continuing commodity volatility and short-term inflationary pressure.
The market reaction was weaker than HUL’s usual results-day move
The stock fell -2.74% on the results day and underperformed the benchmark by -2.00%. That decline was larger than the 1.78% median absolute move after the company’s results across the last eight quarters, when the stock rose twice and fell six times. The decline extended to -4.79% after 15 sessions and -6.84% after 30 sessions.
Q4FY26 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q4FY26 | Q3FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹16,351 cr | ₹16,441 cr | -0.55% | +4.35% |
| Other income | ₹507 cr | ₹-444 cr | — | +198.24% |
| Expenses | ₹12,510 cr | ₹12,653 cr | -1.13% | +3.81% |
| Operating profit | ₹3,841 cr | ₹3,788 cr | +1.40% | +6.13% |
| Operating margin (%) | 23.49% | 23.04% | — | — |
| Interest | ₹76 cr | ₹88 cr | -13.64% | -5.00% |
| Depreciation | ₹348 cr | ₹337 cr | +3.26% | +0.29% |
| Profit before tax | ₹3,924 cr | ₹2,919 cr | +34.43% | +16.72% |
| Tax | ₹922 cr | ₹801 cr | +15.11% | +3.95% |
| Net profit | ₹2,994 cr | ₹6,603 cr | -54.66% | +20.97% |
| EPS (₹) | ₹12.73 | ₹28.12 | -54.73% | +21.47% |
Operating margin of 23.49% compares with a Fast Moving Consumer Goods sector median of 16.75% across 26 peers that have reported Q4FY26.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | -2.74% | -2.00% |
| Next session | -0.22% | — |
| 5 sessions | -1.15% | -1.15% |
| 15 sessions | -4.79% | — |
| 30 sessions | -6.84% | — |
Volume on the results session was 1.87× its 20-day average.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- Home Care delivered 14% underlying sales growth, its highest growth in three years, while maintaining volume resilience.
- Coffee delivered double-digit, volume-led growth, with RTD and Bru Gold continuing to scale up.
Guidance & outlook
- The company expects FY27 to be better than FY26, led by portfolio and channel transformation.
- The company expects consolidated EBITDA margin to remain around the current guided range.
- The company will continue monitoring monsoon and geopolitical developments while viewing the underlying economy as resilient.
- The company is focused on driving competitive, volume-led revenue growth anchored to its key priorities.
Expansion
- The company is scaling investments in market development, channel expansion and portfolio transformation.
New products
- Liquid I.V. launched a sugar-free variant during the quarter.
- Vaseline launched a Gluta Hya Smoothening Body Lotion during the quarter.
New initiatives
- Disciplined market development and consumer-centric innovations enabled Home Care's highest growth in three years.
- The company is investing in newer offerings during the transition of the OZiva business.
- Focused initiatives are boosting Vim Liquids penetration and supporting double-digit growth.
Competition
- Home Care strengthened market leadership while maintaining volume resilience.
Problems & risks
- The company is navigating geopolitical disruption, volatile commodities and currency, and persistent inflationary pressures.
- Commodity volatility persists, with inflationary pressures expected to continue in the short term.
- Palm oil inflation persisted for the second consecutive year and affected Personal Care.
- OZiva had a soft performance as the company transitions the business.
What to watch
- Whether operating margin holds above 23.49% after three consecutive quarterly increases.
- Whether revenue growth improves from +4.35% YoY while expense growth remains below it.
- Whether other income remains below its 12.92% share of pre-tax profit.