HUL Q2 FY26 Earnings Preview: What to Expect from India's FMCG Giant Amid GST Impact and Margin Pressure

India's Largest FMCG company, Hindustan Unilever Ltd (HUL) will report its Q2 FY26 results tomorrow, and the market is keeping a close eye on the company's performance. The FMCG sector has experienced a relatively stable quarter, but some transitory factors and commodity price pressures have influenced growth factors. After a fairly good Q1, HUL is expected to maintain stable volume growth at around 2% year-on-year, because of steady demand across its core categories.

Sector Performance & GST Transition Impact

"The GST rate rationalization from 22nd September caused a temporary disruption across trade channels, affecting sales growth in 2Q FY26. Analysts estimate a 300-400 basis points hit to volume growth due to this transition." as per HDFC Securities report.

Pricing trends remain varied across FMCG players. Marico maintained high single-digit price hikes, while HUL and Nestle implemented moderate increases. Despite these measures, margins are under pressure due to rising raw material costs, especially copra and palm oil. This has led to year-on-year margin compression for HUL.

What to Watch in HUL Q2 FY26

Analysts expect HUL to report steady topline expansion, supported by volume recovery post-GST disruption. EBITDA growth may lag revenue due to commodity inflation and increased business investments. Key segments such as personal care, home care, and foods will determine overall earnings resilience.

HUL Earnings Expectations In Q2

As per JM Financials report, Hindustan Unilever Limited (HUL) is expected to report sales of Rs. 161,189 crore in Q2 FY26, reflecting a 2.5% year-on-year growth from Rs. 157,290 crore in Q2 FY25. While revenue growth remains modest, it indicates steady demand across key categories despite macroeconomic challenges.

On the profitability front, EBITDA is estimated at Rs. 36,185 crore, down 4.6% YoY, suggesting some pressure on margins, likely due to rising input costs and competitive pricing. Adjusted PAT is projected at Rs. 24,406 crore, a 6.1% decline YoY, due to margin contraction and higher operating expenses impacting net earnings.

HUL Q1 FY26 Performance Recap

Hindustan Unilever Ltd (HUL) reported a 6% year-on-year increase in consolidated net profit, reaching Rs 2,768 crore for Q1 FY26, April-June 2025), due to volume-led growth across major product categories.

The company's total revenue rose 5% to Rs 16,323 crore, with underlying volume growth (UVG) at 4% and underlying sales growth (USG) at 5%.

Excluding exceptional items, profit after tax fell 5% year-on-year to Rs 2,526 crore. Meanwhile, EBITDA for the quarter stood at Rs 3,718 crore, slightly down from Rs 3,744 crore in the same quarter last year. The EBITDA margin contracted by 130 basis points to 22.8%, in line with HUL's guidance.

HUL Share Price Movement

HUL shares ended the Muhurat trading session on October 21 at Rs. 2,591.70, marginally down 0.10%. Over the past five trading days, the stock has gained 2.40%, due to rising anticipation ahead of the Q2 FY26 results. So far in 2025, HUL shares have appreciated by 11.45%.

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