Why Hindustan Unilever Share Price Is Diving Nearly 3% Today

Shares of Hindustan Unilever (HUL) were tumbling on a full session of trade on Saturday after the company’s results came below expectations on weak rural demand.

What Happened: The fast-moving consumer goods (FMCG) major reported a modest 0.6% year-on-year increase in net profit for the quarter ended December to ₹2,519 crore. However, this fell short of market expectations.

The revenue from operations also declined slightly by 0.3%, settling at ₹15,188 crore, also missing estimates.

Underlying sales growth remained flat during the quarter, and the volume growth was a modest 2% compared to the previous year.

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On the operational front, the company’s performance was lackluster, with EBITDA increasing by a mere 0.1% to ₹3,540 crore. Operating margins saw a marginal expansion of 8 basis points to 23.31%.

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Segment Breakdown: The homecare segment, which contributes 36% to the total revenue, reported a 1% decline in underlying sales, with mid-single-digit growth in volumes. The beauty and personal care segment, constituting 38% of the revenue, witnessed mid-single-digit volume growth but flat sales growth. The foods and refreshments segment, contributing 24% to the revenue, showed a modest 1% growth in sales in value terms, with volumes experiencing a low single-digit decline.

Within the different portfolios, the fabric wash and household care segments demonstrated mid-single-digit and low-single-digit volume growth, respectively. The skincare and color cosmetics portfolio was impacted by delayed winter, while the hair care portfolio saw double-digit volume growth. The skin cleansing portfolio, however, was hit by price cuts.

Looking ahead, HUL aims to focus on driving competitive volume growth, increasing investments in brands and maintaining healthy operating margins. However, the company anticipates a downward trend in prices if commodity prices remain stable.

Price Action: Hindustan Unilever’s share price was down 2.88% at ₹2,491.50 in the morning session of trade on Saturday.

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