HUL’s latest filing shows the company steering its Q2 EBITDA margin into the 22.5‑23.5% corridor, a figure that aligns with the 22‑24% long‑term guidance it had set earlier in the year.
The 7% price hike—HUL’s highest in the past three quarters—was introduced to counter a 10‑15% rise in raw‑material expenses, a trend echoed across the FMCG sector. According to Abneesh Roy, Executive Director at Nuvama Institutional Equities, “most companies are passing on double‑digit inflation, and HUL’s 7% lift is a modest response.”
Roy highlighted that the margin compression from these cost pressures is expected to be 50‑150 basis points, a figure that reflects the company’s decision to trim advertising spend by 4‑6% this quarter. This manoeuvre should cushion the impact of the price hike on profitability.
In comparison, peers such as Asian Paints and Pidilite are also reveling double‑digit price increases, yet Asian Paints’ EBITDA is projected to stay within its 18‑20% band thanks to better commodity pricing. ITC, on the other hand, faces a double‑digit EBITDA decline in its cigarette segment, signalling a divergent trajectory within the FMCG space.
Looking ahead, HUL is slated to release its Q3 results on May 15, with analysts eyeing whether the margin will hold at the lower end of guidance as crude prices inch toward $120 per barrel. The company’s board has already approved a modest dividend hike, signalling confidence in its cash‑flow resilience.