Synopsis: A large-cap FMCG stock fell over 5% despite 121% YoY profit growth, as revenue rose modestly and margins stayed flat. Investors also tracked its ₹824 crore acquisition and other disinvestment.
A Large-cap FMCG company, primarily engaged in the business of Home Care, Beauty & Personal Care and Foods & Refreshment segments, has come into the spotlight following the announcement of its Q3 financial results, attracting attention from investors and market watchers.
With a market capitalization of Rs. 5,58,803.29 crore, the shares of Hindustan Unilever Limited were trading at Rs. 2,378.40, down by 3.42 percent from its previous day’s closing price of Rs. 2,462.90 per equity share. The stock has touched an intraday low of Rs. 2,350.35, implying a downside of 4.57 percent from previous day’s close price.
Q3FY26 Results
The company reported revenue of Rs. 16,197 crore in Q3FY26, reflecting a 5.7 percent YoY growth compared to Rs. 15,322 crore in Q3FY25. On a sequential basis, revenue increased 3.1 percent QoQ from Rs. 15,715 crore in Q2FY26, indicating steady improvement in topline performance.
EBITDA stood at Rs. 3,788 crore in Q3FY26, registering a 2.7 percent YoY growth over Rs. 3,689 crore in Q3FY25. Compared to Rs. 3,785 crore in Q2FY26, EBITDA remained largely flat with a marginal 0.1 percent QoQ increase, suggesting stable operating margins during the quarter.
The company posted a sharp jump in profit to Rs. 6,603 crore in Q3FY26, delivering a strong 121.0 percent YoY growth from Rs. 2,989 crore in Q3FY25. Sequentially, profit surged 145.1 percent QoQ from Rs. 2,694 crore in Q2FY26, reflecting a significant improvement in bottom-line performance.
Why is the stock down?
The company’s shares declined by 5 percent despite a 120 percent increase in net profit because the sharp rise in profit was largely driven by an exceptional gain of Rs. 4,516 crore from discontinued operations, rather than sustainable core business performance.
Investors typically focus on operational earnings and recurring profitability, and when profit growth is primarily supported by one-time or non-recurring items, the market may react negatively as it does not reflect the company’s underlying earnings strength.
Other Updates
The Board of Directors, at its meeting held on 12th February 2026, approved the acquisition of the remaining 49 percent stake in Zywie for a cash consideration of Rs. 824 crore, in accordance with the terms of the SSSPA. Upon completion of the transaction, Zywie, along with its wholly owned subsidiary Zenherb Labs Private Limited, will become wholly owned subsidiaries of the company. The Board also approved the sale of the company’s entire 19.8 percent shareholding in Nutritionalab as part of its strategic decision.
Hindustan Unilever Limited demerged its ice cream business, Kwality Wall’s India Limited, into a separate publicly listed entity as part of a strategic restructuring aimed at unlocking value and providing focused management attention to the segment. The demerger became effective on 1 December 2025, with 5 December 2025 set as the record date for determining shareholder entitlement.
Under the approved scheme, HUL transferred its entire ice cream portfolio, including brands such as Kwality Wall’s, Cornetto, Magnum, Feast, and Creamy Delight, to the new entity, and shareholders received one share of Kwality Wall’s India Limited for every one HUL share held. The move is intended to enable the ice cream business to operate independently with greater strategic flexibility while allowing investors to directly participate in its growth trajectory.
About The Company
Hindustan Unilever Limited (HUL) is a leading FMCG company headquartered in Mumbai, India, and was founded in 1888. The company manufactures and sells a wide range of consumer products across segments including Home Care, Beauty and Wellbeing, Personal Care, and Foods.
Its portfolio includes detergents, skin and hair care products, oral care items, deodorants, culinary products, tea, coffee, nutrition products. In addition to its core FMCG operations, HUL is also involved in exports, beauty salon services, job work, real estate, and discharge trust activities, with a presence in both domestic and international markets.
A return on equity (ROE) of about 20.7 percent, a return on capital employed (ROCE) of about 27.8 percent and debt to equity ratio at 0.04 demonstrate the company’s financial position. At the moment, the company’s P/E ratio is 53.78x higher as compared to its industry P/E 45.7x.
Over the past five years, the company has demonstrated strong growth, achieving a revenue CAGR of 10 percent, a profit CAGR of 9 percent and a share price CAGR of 3 percent, reflecting operational performance and share price performance.
Future Outlook
Hindustan Unilever Limited’s outlook highlights a positive growth trajectory supported by macroeconomic stability and favorable policy measures expected to create a conducive environment for consumption, with FY27 anticipated to outperform FY26 driven by portfolio and channel transformation initiatives. The company remains committed to sustained investment in the business while maintaining consolidated EBITDA margins within the current guided range, and it aims to drive competitive, volume-led revenue growth anchored around its four key strategic priorities.
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