Copyright © HT Digital Streams Limited All rights reserved. HUL Q2 preview: Eyes on flat sales growth, muted earnings, a new CEO’s plans ahead Hindustan Unilever’s second quarter fiscal 2026 results are expected to report flat year-on-year growth on GST-related disruptions. Summary Hindustan Unilever’s new chief executive and managing director, Priya Nair, will present her first quarterly earnings on Thursday. Sales are expected to be flat and profits muted in a GST rate transition. Analysts will be keeping an eye on the impact of GST rate cuts and the new management’s comments on consumer demand. New Delhi: Consumer packaged goods company Hindustan Unilever Ltd (HUL) is expected to report equivalent to 1% year-on-year growth in its September quarter volume sales and revenue due to the transition to the newly revised Goods and Services Tax (GST). HUL, India’s largest fast-moving consumer goods company, will announce its financial results for the July-September quarter on Thursday. This is the first quarter under new CEO Priya Nair. The GST cuts benefited 40% of the HUL portfolio spanning soaps and shampoos, prompting it to pass on the benefits to consumers through high single digit to low double digit price cuts. But primary sales to distributors and retailers were affected as they paused new orders to clear inventory and wait for new stock with revised, lower prices. Consumers also delayed purchases in anticipation of lower prices. Brokerage firm JM Financial estimated that sales in the first two months of the passing quarter were in line with momentum in the April-June quarter when the maker of Lux soap and Knorr soup grew sales volumes by 3% after three quarters of slowing growth. Standalone net profit rose 8% to Rs2,732 crore on a 4% jump in sales to Rs15,747 crore. “Our channel checks indicate that underlying demand trends in July and August were broadly similar to those in 1QFY26. With GST transition-led impact in September, HUL expects near-flat to low-single-digit consolidated sales growth in 2QFY26,” JM Financial analyst Mehul Desai said in a note dated 26 September. However, the impact is one-off with recovery predicted from November, the analyst added. A Bloomberg poll of 15 analysts pegged HUL’s consolidated revenue at Rs16,024 crore and a profit after tax of Rs2568.6 crore. While a poll of 21 analysts pegged HUL’s standalone revenue at Rs15,938 crore, 18 analysts expected a profit of Rs2511.5 crore. HUL, which reported a turnover of Rs60,680 crore last year, has introduced price cuts of up to 15% across several popular product categories as part of its rationalization exercise in response to GST cuts that began on 22 September. Tariff cuts have benefited HUL across its portfolio. GST rates changed to 5% from 18% for soap, shampoo, toothpaste, among a range of consumer products. However, the company flagged supply chain disruptions following the rate cuts. In a statement to stock exchanges on September 26, the company said: “We have seen a transitory impact in the form of disruption at distributors and retailers across channels to clear existing stock with old prices. This has led to the postponement of orders pending the receipt of new stock with lower orders with updated consumer portfolios and the consumer delay in buying.” Some of these will continue into October, it continued. “This resulted in a short-term impact on sales for the company in September. Given our existing pipeline inventory in the channels, we expect this impact to continue into October as well.” Among key products, the price of Dove Hair Oil Rescue Shampoo (340ml) has been reduced from Rs490 to Rs435, an 11.2% reduction, while Clinic Plus Strong & Long Shampoo (355ml) has dropped by 13.5% to Rs340. In the soap category, Lifebuoy (75g × 4-pack) and Lux Radiant Glow (75g × 4-pack) have become cheaper by around 11–12%, at Rs60 and Rs85 respectively. In the food and beverage portfolio, Horlicks Chocolate (200g) is now at Rs110 instead of Rs130, a reduction of 15.4%, and Bru Coffee (75g) is down 10% to Rs270, analysts at JM Financial noted. Eyes on new leadership HUL’s management commentary on Thursday will provide more details on how the GST transition has affected its portfolio and whether the price changes since then have helped consumer demand. The quarter is also the first under the leadership of Priya Nair, who was appointed as CEO and MD of the company with effect from August 1 following the departure of predecessor Rohit Jawa. All eyes will be on Nair’s comments on demand trends and how the new chief handled the rather complicated transition to GST. Nuvama Institutional Shares analyst Abneesh Roy wrote in a research note, “HUL is already showing aggression and speed under the new managing director as the company was among the first to come out with advertisements conveying new prices under the revised GST regime.” Yes Securities, meanwhile, said lower input prices were offset by higher sales promotions and this will be reflected in profitability statistics in the September quarter. 190 bps on a year-on-year basis to 22%. EBITDA and recurring PAT are likely to decline by 6.4% and 8% y-o-y respectively,” analyst Vishal Punmiya said in a note on the consumer goods sector on October 5. Meanwhile, Nuvama expects HUL to report a 1% yoy increase in consolidated revenue, compared to a 5.2% rise in Q1FY26 and 2.4% in Q2FY25. Underlying consolidated volumes are likely to remain flat on a year-on-year basis, versus 4% growth in the June quarter of the current fiscal and 3% in the March quarter of the last fiscal. Consolidated EBITDA is expected to decline 5% year-on-year, following a 1.4% decline in Q1FY26 and a flat performance in Q2FY25. On the input cost front, palm oil prices continue to show volatility, while tea prices moderated slightly amid early-season deflationary trends. In the June quarter, the company cut tea prices in response to competition and lower input costs as well as to its home care portfolio. As a result, price-led growth is expected to be low during the quarter will record single-digit underlying growth (1%); however, it has increased prices in skin care due to higher palm-derived costs, Nuvama analyst Roy said in a research note. Get all the corporate news and updates on Live Mint. Download the Mint News app to get daily market updates and live business news. more topics #Hindustan Unilever #fmcg Read next story
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