HUL Q2 FY26: Revenue Up 2%, PAT Up ~4% Amid GST-Led Disruption

HUL Q2 FY26: Revenue Up 2%, PAT Up ~4% Amid GST-Led Disruption

Hindustan Unilever posted a modest quarter: revenue rose about 2% while reported PAT grew ~4% helped by a one-off tax benefit — margins were under pressure and management declared an interim dividend of ₹19 per share.

*What happened this quarter*
* Revenue from operations (consolidated) for Q2 FY26: ₹16,034 crore, up from ₹15,703 crore a year ago (≈ +2% YoY).
* Earnings before interest, tax, depreciation and amortisation (EBITDA) for the quarter: ₹3,729 crore; EBITDA margin: 23.2%, down 90 basis points vs Q2 last year.
* Profit after tax before exceptional items: ₹2,482 crore, down 4% YoY.
* Reported Profit After Tax (PAT, after exceptional items): ₹2,694 crore, up ~4% YoY (consolidated).
* Board declared an interim dividend of ₹19 per share (record date: 7 Nov 2025).

*Detailed numbers (consolidated)*
* Revenue from operations: ₹16,034 crore (Q2 FY26) vs ₹15,703 crore (Q2 FY25).
* Total income (quarter): figures shown in the filing also list components of other income and operating segments (see official table).
* EBITDA: ₹3,729 crore. EBITDA margin: 23.2% (decline of 90 bps YoY).
* Profit before exceptional items (PAT before exceptions): ₹2,482 crore (down 4% YoY).
* Exceptional items (net): one-off +₹273 crore (favourable tax resolution between UK & India), restructuring costs ₹51 crore, and acquisition/ disposal costs ₹38 crore. These swing the pre-exception PAT to the reported PAT.
* Reported PAT (after exceptions): ₹2,694 crore (≈ +4% YoY).
* Basic earnings per share (EPS): ₹11.43 for the quarter (basic).
* Total comprehensive income (quarter): ₹2,698 crore (group level table). Paid up equity: 235 crore shares (face value Re. 1).

*Why revenue was muted and margins fell*
* The filing and the company commentary point to GST-led disruption (rate changes) that affected pricing and demand for a part of the portfolio, which pressured volumes and realizations in the quarter. This is visible in the modest top-line growth despite HUL’s scale.
* Margin contraction (90 bps in EBITDA margin) was because of a mix of higher input/ operational costs, continued investment/marketing spend and the temporary dilution in pricing power related to the GST transition.

*Segment/ cash flow/ other pointers*
* The company’s statement includes segment-level sales and operating data (Home Care, Beauty & Well-being, Personal Care, Foods). The consolidated schedules also show standalone numbers for comparability.
* Cash flows: the cash generated from operations and movement in working capital are shown in the cash flow tables (operating cash flow and taxes paid are disclosed in the filing).

*Segment-wise snapshot*
While the company’s full segment-table for Q2 FY26 is only partially disclosed in the public summary, previous commentary from HUL suggests the following trends (for guidance into Q2):
* The Home Care division has historically grown at low-single to mid-single digit sales growth, with volume growth being stronger than value growth (as the business absorbs input inflation and passes on less pricing).
* The Beauty & Well-being/ Personal Care business has seen better momentum in premiumisation, with moderate unit growth but heavier investment behind brands.
* The Foods & Refreshments segment has been weaker, with demand softness in some categories and cost inflation from commodities like tea and coffee.
* Management commentary (in recent prior quarters) emphasises a shift from margin-first to growth-first: higher brand and trade-spend, more focus on digital & e-commerce channels.

*Outlook and what management has signalled*
HUL has stated it expects consumer demand to gradually improve through FY26, buoyed by lower commodity inflation, improving rural macro trends and continued investment in brand/digital. However, management continues to flag near-term margin pressure due to elevated input costs, trade spend and channel investments. They anticipate volume growth to recover gradually while price growth remains modest.

*Management actions & shareholder returns*
Management approved an interim dividend of ₹19 per share (record date 7 Nov 2025; payment 20 Nov 2025). This signals continued focus on returning cash to shareholders despite the quarter’s headwinds.

*Takeaways*
* Topline: steady but muted — revenue +2% YoY.
* Profit: reported PAT +~4%, helped by a one-off tax benefit; underlying PAT before exceptions down ~4%.
* Margins: under pressure — EBITDA margin down 90 bps to 23.2%.
* Shareholder friendly: interim dividend ₹19/sh.

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