HUL Q2FY27: Sales Up 15% but Shares Tumble

Hindustan Unilever Limited reported its highest underlying sales growth in 14 quarters during Q2FY27, supported by higher volumes and selective price increases. However, rising commodity costs weighed on operating margins, limiting profit growth despite strong revenue performance. Shares declined following the results on October 28, 2026, before recovering marginally in early trade on October 29.

HUL Q2FY27 Results: Revenue Rises 15%, Profit Growth Remains Subdued

HUL's consolidated turnover for the quarter ended September 30, 2026, increased 14.8% YoY to ₹18,071 crore from ₹15,742 crore. Revenue from operations rose 14.5% YoY to ₹18,226 crore.

Underlying sales growth stood at 15%, the highest in 14 quarters, while underlying volume growth reached 7%.

Net profit attributable to owners of the parent.

Despite double digit revenue growth, consolidated net profit increased only 3.9% YoY as higher operating expenses weighed on profitability. Total expenses rose 15.9% YoY to ₹14,574 crore.

Meanwhile, profit after tax before exceptional items increased approximately 9.5% to ₹2,795 crore.

Rising Commodity Prices Put Pressure on Margins

Higher raw material costs remained a key challenge for HUL during Q2FY27. The company selectively increased product prices to offset inflationary pressures, while stronger volumes also supported revenue growth.

However, expenses increased faster than revenue, resulting in EBITDA margin contracting from 24% in Q2FY26 to 22.6% in Q2FY27, a decline of 140 basis points.

Commodity inflation is expected to remain elevated in the near term, partly due to geopolitical tensions and higher energy prices.

Despite these pressures, HUL maintained its FY27 EBITDA margin guidance of 22% to 24%.

The company's ability to recover higher input costs through pricing will remain important, although further price increases could affect demand in price-sensitive categories.

Home Care and Beauty & Wellbeing Drive Growth

HUL's Home Care segment delivered the strongest performance during the quarter, supported by demand for fabric washing and household cleaning products.

Home Care recorded double digit volume growth, while Beauty & Wellbeing benefited from demand for hair care and premium skincare products.

Personal Care growth was supported by skin cleansing products, while the Foods segment reported growth across packaged foods and nutrition categories.

HUL continued expanding its premium product portfolio, particularly in skincare and hair care.

For H1FY27, consolidated turnover reached ₹35,255 crore, with underlying sales growth of 12% and underlying volume growth of 6%.

The company's board also declared an interim dividend of ₹19 per share, fixing November 12, 2026, as the record date.

Why Did HUL Shares Fall Despite Strong Revenue Growth?

HUL shares witnessed significant volatility on October 28, 2026, following the announcement of quarterly results.

The stock touched ₹1,861.20 on the NSE before declining to an intraday low of ₹1,765.50. It eventually closed at ₹1,815.80, down approximately 2.2%.

The decline reflected concerns over contracting operating margins, rising expenses and persistent commodity inflation despite strong sales and volume growth.

However, shares recovered marginally in early trade on October 29, gaining approximately 0.6% to ₹1,827.

Conclusion

HUL's Q2FY27 performance reflected improving consumer demand, with 15% underlying sales growth and 7% volume growth led by Home Care and Beauty & Wellbeing.

However, higher commodity costs and operating expenses restricted earnings growth, with EBITDA margin declining by 140 basis points.

Going forward, the key factors to monitor will be commodity price trends, volume growth, pricing actions and the company's ability to maintain its FY27 EBITDA margin guidance of 22% to 24%.