ET Intelligence Group: The stock of Hindustan Unilever gained 3.5% on Thursday amid volatile market conditions after the country’s largest fast-moving consumer goods company reported June quarter performance, which was at the upper end of market expectations. While the operating margin before depreciation and amortisation (Ebitda margin) contracted by 130 basis points on-year to 22.8% due to higher advertising and promotion costs, it is likely to expand in future helped by a combination of higher product prices and stable input costs.

The company expects to sustain the business momentum in the coming quarters.

Price increase will be in the low-single digits assuming a similar increase in commodity prices. The Ebitda margins will likely remain between 22% and 23%. After staying volatile in the previous three quarters, the company’s sales volume grew by 4% in the June 2025 quarter, matching the previous year’s growth rate. HUL‘s underlying sales growth (USG) saw a gradual uptick to 5% from 2% in the year-ago quarter. On a year-on-year basis, revenue and net profit grew 5% and 6% to ₹16,323 crore and ₹2,768 crore, respectively.

In the home care segment, revenue grew by 1.8% on year to ₹5,777 crore in the June quarter, similar to the growth seen in the previous quarter. However, it declined on a sequential basis after rising for the past three quarters. The segment pricing fell amid steep competition as the company passed on commodity price benefits to consumers.

Revenue of the beauty and wellbeing segment grew by 13.5% year over year to ₹3,631 crore in the June quarter. OZiva, a plant-based nutritional and beauty brand, witnessed significant acceleration with a three-fold increase in turnover year-on-year to ₹450 crore. The recently acquired direct-to-consumer skin care business, Minimalist, delivered strong double-digit growth. After declining by 5% in the year-ago quarter, USG of the personal care segment has consistently improved in the subsequent quarters to reach 6% growth in the June 2025 quarter, driven by pricing measures implemented as a result of commodity inflation.

Similarly, margins improved to 19% from 18% in the same period. Revenue was at ₹2,540 crore, up 6.5% year-over-year.In the food segment, USG improved to 5% in the June quarter from 1% in the year-ago quarter while revenue rose by 4.3% to ₹4,016 crore. However, margin dropped to 16% in the first quarter of FY26 from 19% a year ago, impacted by early onset of rains.The company anticipates the first half of FY26 to be better than the second half of the previous financial year, owing to portfolio transformation and improving macro conditions. The stock has gained nearly 10% over the past month and is expected to remain on investors’ radar given the hopes of a gradual recovery.