Hindustan Unilever Ltd (HINDUNILVR) Q2 FY27 Results Analysis: USG Hits 14-Quarter High, EBITDA Margin Slips 141 bps

Hindustan Unilever Ltd's Q2 FY27 numbers came in strong, with revenue of Rs. 18,071.00 Cr (+14.79% YoY) and PAT growth of +3.79% YoY. Here's a quick read of what worked, what to watch, and what management said.

Quarter Snapshot

Q2 FY27 delivered the highest USG in 14 quarters at 15% with UVG of 7%, and normalized PAT grew 9.48%, while EBITDA margin of 22.63% held within the guided band but at its lower end, down 141 bps YoY. Growth is volume-led and the FY27-better-than-FY26 guidance is on track, but margin squeeze is concentrated in Home Care (-297 bps) and Personal Care (-313 bps), with A&P cut 9.25% YoY providing the offset. Cash quality is high with H1 CFO at 1.46x PAT and FCF of Rs.7,356 cr.

Key Investment Insights

Key Positives

• Turnover grew 14.79% YoY to Rs.18,071 cr; USG of 15% is the highest in 14 quarters
• UVG of 7% vs flat volumes in Q2 FY26; H1 USG 12% vs FY26 full-year 5%
• Home Care revenue grew 21.43% YoY with double-digit UVG; Foods EBIT margin expanded 134 bps
• Normalized PAT (bei) grew 9.48% YoY to Rs.2,795 cr
• H1 CFO of Rs.8,022 cr at 1.46x PAT; FCF of Rs.7,356 cr
• EBITDA margin of 22.63% held within the guided 22.5%-23.5% band despite inflation
• Interim dividend of Rs.19/share declared, identical to FY26 interim

Risk Factors

• EBITDA margin compressed 141 bps YoY to 22.63%, at the lower end of the guided band
• Home Care EBIT margin fell 297 bps YoY to 16.15% despite +21.43% revenue growth; segment EBIT grew only 2.59%
• Personal Care EBIT margin fell 313 bps YoY with segment result down 8.74%
• A&P spend fell 9.25% YoY to 8.20% of sales, reversing the prior step-up in brand investment
• Effective tax rate rose ~208 bps YoY to 26.69%
• Purchases of stock-in-trade jumped 61.90% YoY with a Rs.507 cr inventory build at higher costs