FMCG Stock Reports Highest Underlying Sales Growth in 14 Quarters, Declares Rs 19 Interim Dividend; Trades Below Median PE

Hindustan Unilever Ltd’s consumer goods portfolio has been gaining traction through premium products, liquids, market-development programmes and wider channel execution. The company reported consolidated turnover of Rs 18,071 crore for the quarter ended September 30, 2026, with underlying sales growth of 15 per cent, its highest in 14 quarters, and underlying volume growth of 7 per cent.

The growth was broad-based across its four principal businesses. Home Care was the strongest performer, reporting 22 per cent underlying sales growth and double-digit volume growth. Revenue in the segment stood at Rs 6,878 crore, while its margin was 16 per cent. Fabric Wash and Household Care benefited from improved penetration, calibrated pricing and continued demand for liquid formats.

Beauty & Wellbeing recorded 16 per cent underlying sales growth, supported by double-digit volume growth in hair care, skin care and colour coSMEtics. The segment generated revenue of Rs 4,319 crore and retained the highest segment margin at 29 per cent. The company continued to add premium offerings, including Simple’s Barrier Repair Range, Dove Body Serum lotions and an expanded Minimalist range.

Personal Care grew 9 per cent, although underlying volume growth was flat as pricing actions in skin cleansing offset inflationary pressure. Foods also reported 9 per cent growth, aided by Lifestyle Nutrition and Packaged Foods, while volume growth remained in the low-single digits. Horlicks entered the protein powder category during the quarter, extending its presence in the fast-growing nutrition space.

Earnings growth lagged revenue growth as input-cost pressure weighed on profitability. Earnings before interest, Tax, depreciation and amortisation, or EBITDA, rose 8 per cent YoY to Rs 4,089 crore, while the EBITDA margin declined by 140 basis points to 22.6 per cent. Profit after tax before exceptional items increased 9 per cent to Rs 2,795 crore. Reported profit after tax was broadly flat at Rs 2,796 crore because the previous year’s figure included a Rs 273 crore one-off tax-related gain.

For the first half, turnover reached Rs 35,255 crore, with 12 per cent underlying sales growth and 6 per cent volume growth. The board declared an interim Dividend of Rs 19 per equity share, with November 12, 2026, as the record date and November 25, 2026, as the payment date. Management retained its consolidated EBITDA margin guidance of 22 to 24 per cent amid continuing commodity inflation.

As of 9.40 am on October 28, 2026, HUL shares were trading at Rs 1,813.95, down 0.33 per cent from the previous close. The company had a market capitalisation of about Rs 4,27,626 crore. The stock has declined 27.23 per cent over one year, compared with a 9.01 per cent fall in the BSE 500 over the same period, underperforming the broader index by about 18.2 percentage points.

What This Means for Investors

The quarter strengthens the evidence that HUL’s growth is becoming more broad-based and volume-led. Home Care and Beauty & Wellbeing are doing much of the heavy lifting, with both categories benefiting from premiumisation, innovation and deeper market penetration. The 7 per cent underlying volume growth is especially relevant because it indicates that demand has remained resilient even as the company has used pricing to manage cost inflation. Foods also adds a useful growth lever through nutrition, coffee and packaged offerings.

The investment read-through is constructive but balanced by margin pressure. EBITDA margin fell to 22.6 per cent, though it remains within management’s 22 to 24 per cent guidance range. The key issue will be whether HUL can sustain volume momentum while containing commodity-led pressure through savings, mix improvement and calibrated pricing. Personal Care remains the principal watchpoint because volume growth was flat amid inflation in soap-related inputs. Continued strength in higher-margin Beauty & Wellbeing could help support profitability over the medium term.

Disclaimer: The article is for informational purposes only and not investment advice.