HUL Q4 Results Show 3.4% Drop in Net Profit as Ad Spend Falls Year-on-Year

Posted on April 24, 2025, by Niftynews

HUL Q4 Results are out, and the FMCG major reported a net profit of ₹2,475 crore for the March 2025 quarter, reflecting a 3.4% decline from ₹2,561 crore in the December quarter. The company also cut its advertising spend by 6.6% year-on-year (YoY), down to ₹1,510 crore from ₹1,616 crore in Q4 FY24.

One of the key highlights of the HUL Q4 results was a notable decline in advertising and promotional (A&P) expenses, which fell 6.6% YoY to ₹1,510 crore. This strategic pullback in ad spend has sparked conversations around cost optimization and consumer demand outlook in India FMCG sector.

📊 HUL’s Advertising Spend: A Strategic Shift?

Advertising and promotion have always played a central role in HUL marketing strategy, with the company being among India’s top ad spenders. In Q4 FY25, however, ad spends declined to ₹1,510 crore from ₹1,616 crore in the same quarter last year—a drop of ₹106 crore.

Quarter-on-Quarter Comparison:

• Q4 FY25: ₹1,510 crore
• Q3 FY25: ₹1,507 crore
  (Just a 0.3% increase QoQ)

Full-Year Spend:

For the entire FY25, HUL’s consolidated advertising spend stood at ₹6,199 crore—a 4.5% decrease from ₹6,489 crore in FY24.

The reduction in ad spends may reflect tightened cost controls, evolving consumer behavior, or a recalibrated focus toward digital-first strategies and performance marketing over traditional media.

💬 CEO’s Commentary: Portfolio Transformation in Focus

Rohit Jawa, CEO and Managing Director of HUL, addressed the company’s performance and future direction:

“In FY25, our turnover surpassed ₹60,000 crore, with an underlying sales growth of 2% and an EPS growth of 5%. While absolute volume tonnage grew in mid-single digit, it was partially offset by a negative mix.”

Jawa emphasized several major milestones during the year:

• Acquisition of Minimalist (skincare and beauty brand)
• Divestment of Pureit (water purifier segment)
• Decision to demerge the Ice Cream business
• Increased innovation across high-growth categories
• Amplified investments in digital and D2C channels

He added that while current demand trends remain modest, FY26 is expected to see gradual improvement, supported by stable fundamentals and strategic realignment.

📈 HUL Q4 Financial Snapshot

Despite the earnings dip, the company maintained its market leadership position and delivered resilient topline growth amidst volatile consumption trends.

🔍 What’s Behind the Decline in Profit?

Several factors may have contributed to the lower profit figures:

1. Muted Rural Demand: Slower-than-expected recovery in rural consumption remains a concern for FMCG players, including HUL.
2. Product Mix Impact: While volume grew modestly, a negative product mix affected profitability.
3. Input Cost Volatility: Although raw material prices have somewhat stabilized, legacy input cost pressures may still be reflected in margins.
4. Strategic Investment Phase: The ongoing portfolio transformation, M&A activity, and digital investments may weigh on short-term earnings but aim to drive long-term growth.

🔮 Outlook for FY26: Will Demand Rebound?

Looking ahead, HUL remains cautiously optimistic. The company expects demand conditions to gradually improve as macroeconomic indicators stabilize and consumer confidence returns.

With strategic focus on:

• High-growth product categories
• Innovation in personal care and health segments
• Digital expansion and D2C penetration
• International market push

HUL appears to be positioning itself for future resilience and competitiveness, particularly in a dynamic post-pandemic consumption landscape.

📈 Should Investors Buy, Sell, or Hold HUL Stock?

For long-term investors, the HUL Q4 results reflect short-term caution rather than a fundamental weakness.

✅ Consider Buying if:

• You’re focused on long-term growth and dividends
• You believe in HUL’s market leadership and brand strength
• You value a defensive FMCG stock in a volatile market

🚫 Consider Waiting if:

• You seek short-term momentum or expect immediate outperformance
• You’re concerned about profit growth sustainability in the current demand cycle

📉 Share Price Trend:

While HUL shares fell marginally after the earnings announcement, analysts view the correction as technical and temporary. Brokerages are maintaining neutral to moderately bullish calls, emphasizing the company’s strong fundamentals.

📌 Final Thoughts: HUL Stays Strong Despite Short-Term Pressures

The HUL Q4 results may have missed some investor expectations on profit, but the company’s strategic clarity and focus on innovation, portfolio realignment, and cost discipline offer a strong case for sustained performance in FY26 and beyond.

As the FMCG giant reshapes itself for the next phase of growth, investors should watch out for:

• Demand revival in rural India
• Further updates on the demerger and acquisitions
• Cost optimization metrics and margin trajectory