Hindustan Unilever Ltd (HUL) reported a 1.6% year-on-year (YoY) revenue growth to Rs. 15,818 crore in Q3 FY25, as flat volumes were impacted by moderating urban consumption and a gradual rural recovery. Net profit rose 19% YoY to Rs. 2,984 crore, supported by a one-time gain from the divestment of its Pureit business.

HUL highlighted subdued consumer sentiment, with urban demand slowing and a shift towards smaller packs, even in premium categories. CEO Rohit Jawa noted, “Urban demand is moderating, with households tightening budgets, while rural demand remains robust. This trend is unlikely to change in the near term.”

Key Highlights:

• Segment Performance: Growth was led by the home care and beauty & well-being segments, while personal care declined, and the foods category remained flat.
• Commodity Pressures: Elevated prices of tea and palm oil, alongside fluctuating crude oil prices, led to selective price increases. HUL expects low single-digit price growth if commodity costs stabilize.
• Acquisitions:
• UL will acquire a 90.5% stake in beauty brand Minimalist for Rs. 2,955 crore, with the remaining 9.5% to be acquired in two years. Minimalist reported a turnover of Rs. 347 crore in FY24.

Strategic Moves:

• Ice Cream Business Demerger: HUL’s ice cream division will be demerged into its subsidiary Kwality Wall’s (India) Limited (KWIL). Post-demerger, KWIL will be listed, with shares held by HUL shareholders.
• Portfolio Expansion: Jawa emphasized the focus on premiumization and entering high-growth segments, stating, “The acquisition of Minimalist is a step towards expanding our Beauty & Wellbeing portfolio in the masstige beauty segment.”

Despite a challenging consumption climate, HUL remains focused on premiumization, localization, and growth in new demand spaces.

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