HUL Reverses Gains As Management Warns Of Margin Pressures: Retail Sentiment Turns Neutral

HUL stock surged nearly 3% after Q4 earnings but reversed its gains following cautious margin guidance from management. While volumes grew 2%, rising input costs and muted urban demand weighed on overall profitability.

Hindustan Unilever (HUL) delivered a steady performance in its fourth quarter (Q4), but rising input costs and muted urban demand impacted profitability. 

The stock initially rose nearly 3% post-results on Thursday but reversed course after the management flagged a likely moderation in gross margins going forward. 

The FMCG major reported a net profit of ₹2,406 crore, down 6% from ₹2,552 crore in the same quarter last year. Revenue rose marginally to ₹14,693 crore. 

Margins contracted slightly at 23.4%. 

Volume growth for the quarter came in at 2%, with underlying sales growth at just 1%. 

Segment-wise, Home Care grew 5% driven by strong fabric wash performance. Beauty and Personal Care remained flat, impacted by price reductions in soaps. 

Meanwhile, the Foods and Refreshment division posted 2% growth, led by coffee and nutrition drinks.

The board declared a final dividend of ₹24 per share, taking the FY24 total payout to ₹42 per share, reinforcing HUL’s strong cash generation and shareholder focus.

Looking ahead, HUL expects a gradual pickup in growth driven by macro improvements, portfolio transformation, and innovation. If commodity prices remain stable, price growth is expected to stay in the low single digits, with a sharper focus on volume-led competitive growth.

The company added that gross margins are likely to moderate as the company aims to maintain an optimal price-value balance. 

However, EBITDA margins are expected to remain within a healthy 22–23% band, supported by increased investments in high-growth demand spaces.

Data on Stocktwits India shows that retail sentiment on the stock has turned ‘neutral’ from ‘extremely bullish’ a week ago. 

SEBI-registered analyst Financial Independence suggested watching ₹2,510 as a key resistance. 

They add that if the stock sustains above that level, it could rise to  ₹2,600. A breach below ₹2,340 may lead to a correction toward ₹2,140.

HUL stock gained 1% year-to-date (YTD).

At the time of writing the story, shares of HUL were down 3%.

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