Unilever's India arm posts quarterly profit miss as foods, skincare demand slows
India's Hindustan Unilever reported fourth-quarter profit on Thursday that narrowly missed estimates, as rising expenses and weak urban demand for packaged food and affordable personal care products squeezed margins, sending shares down.
The Indian unit of UK's Unilever, home to brands such as Pears bath soap and Surf Excel detergent, reported a standalone net profit of 24.93 billion rupees ($291.15 million) for the quarter ended March 31.
Analysts had estimated 24.98 billion rupees, according to data compiled by LSEG.
Surging food prices and slow wage rises have eroded urban consumers' purchasing power, pressuring earnings of top consumer goods makers such as Hindustan Unilever and Nestle India.
Profits at Hindustan Unilever, which gets roughly 60% of its sales from urban India, have fallen in three of the last five quarters.
The company's earnings before interest, taxes, depreciation and amortisation (EBITDA) margin shrunk 30 basis points to 23.1%, as total expenses for the firm shot up close to 3%.
The stock was last trading down 3.9% at 2,330.4 rupees, nearly wiping out its gains this year. On the day, it has lost the most in terms of percentage on the benchmark Nifty 50.
Revenue from its foods business - which accounts for a quarter of overall revenue - edged lower, with the company citing "continued category" pressure in its nutrition drinks business, which houses its Horlicks and Boost brands.
The skin care and makeup segment posted a low-single digit sales decline as well, dragged by soft demand for affordable products.
However, growth in its other segments led to a 2% increase in total revenue to 150 billion rupees.
Hindustan Unilever projected a gradual sales volume-led growth in fiscal 2026, with performance in the first half likely to improve over the previous six months on new launches and improving demand.
However, Axis Securities analyst Preeyam Tolia said its shift in focus towards volume-led growth could add further pressure on margins in the coming quarters.
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