Hindustan Unilever Q2 sales grow 15%, but margins fall

Hindustan Unilever Limited (NSE: HINDUNILVR) reported Q2 FY27 consolidated net profit attributable to shareholders of ₹2,790 crore, up 3.9% YoY. Turnover increased 14.8% to ₹18,071 crore, supported by strong demand across its FMCG portfolio and 7% underlying volume growth. Key Highlights • Underlying sales growth reached 15%, the highest in 14 quarters. • Underlying volume growth stood at 7%, indicating healthy consumer demand. • EBITDA increased 8% YoY to ₹4,089 crore. • EBITDA margin declined 140 basis points to 22.6%. • Home Care recorded 22% underlying sales growth, supported by double-digit volume growth. • Beauty & Wellbeing grew 16%, while Foods recorded 9% growth. • The company declared an interim dividend of ₹19 per share. My View Hindustan Unilever delivered encouraging sales growth, particularly in Home Care and Beauty & Wellbeing. The most important number is the 7% underlying volume growth. This indicates that business expansion is being supported by higher consumption rather than pricing alone. However, EBITDA growing just 8% against nearly 15% turnover growth highlights pressure on profitability. The 140-basis-point decline in operating margin suggests that stronger demand has not yet translated into proportionate earnings growth. I believe sustaining volume growth while improving operating efficiency will be critical for future profitability. What I'm Watching Next I will monitor underlying volume growth, input costs and EBITDA margins in Q3 FY27. Management's FY27 EBITDA margin guidance of 22–24% will be an important benchmark. Stance: Positive on volume recovery and consumption trends, but cautious on margin pressure. Sustained earnings growth will require better operating leverage. Disclosure: I do not have any holding or position in the stock mentioned above.