Investors will be keenly watching how the US-Iran war-induced volatility in raw materials in March impacted Hindustan Unilever Ltd's (HUL) margins when the packaged consumer goods giant announces its fourth-quarter results on Thursday.
HUL is expected to post a profit after tax of ₹2,612 crore and revenue of ₹16,270 crore in the three months ended 31 March, according to Bloomberg's 21-analyst estimate. In the third quarter, it reported a net profit before exceptional items of ₹2,562 crore and revenue of ₹16,235 crore.
Margin pressures
The company, often considered a proxy for consumption in India, has had a tough March quarter, with several key inputs used across its product portfolio directly exposed to disruptions triggered by the US-Iran war.
For example, the price of palm oil, a key ingredient for HUL, which makes soaps under brands such as Lux, Lifebuoy, Dove, Pears, Rexona and Hamam, has been rising as the war has pushed major producers such as Malaysia and Indonesia to increase their biodiesel capacity.
Similarly, prices of liquid paraffin, used in creams, have edged up slightly. However, soda ash, a key input in detergents, declined during the quarter. HUL markets detergents under brands such as Surf Excel, Rin, and Wheel, as well as personal care products like Dove and Pond’s.
Meanwhile, low tea and coffee prices, down from their 2025 peaks, could provide some relief to the company.
“Higher prices of crude-based commodities with palm oil remaining inflationary despite correction in tea and robusta coffee could impact margins,” analysts at Nomura said in a 3 April report.
HUL's Q3 FY26 Ebitda (earnings before interest, taxes, depreciation and amortization) margin declined 50 basis points to 23.3% year-on-year.
Rising Inflation may also weigh on margins. India’s retail inflation rose from 2.75% in January to a 10-month high of 3.40% in March 2026, driven largely by food prices. Such cycles tend to squeeze smaller, unorganized and regional players that lack the supply chain strength and working capital of larger firms like HUL, according to analysts.
Volumes under strain
“As input costs rise, these smaller competitors struggle to maintain their historical price discounts and face severe margin erosion,” said analysts at ICICI Securities in a 20 April report.
"This dynamic creates a highly favourable environment for large companies like HUL to accelerate market share gains, absorbing volumes from these under-capitalized players that are forced to retreat or raise prices aggressively,” they added.
To be sure, HUL also has implemented calibrated price hikes in recent months. Earlier in April, it said it was passing on increases in input costs to soap prices, reflecting higher crude, palm oil, and plastic prices. In February, before the war broke out, chief financial officer Niranjan Gupta said during the quarterly analyst call, “We do see a stable to an inflationary kind of stuff coming back…For the year, we do expect a low single-digit price increases over the year.”
The markets will keenly watch how inflation is inching up and how it could affect volumes. One of the first tendencies among customers is to downtrade during periods of rising costs. For HUL, which has been premiumizing aggressively, it will be a key monitorable.
This is especially relevant as rivals have reported stellar volume growth in the March quarter. While Nestlé India reported a double-digit volume growth, AWL Agribusiness reported a 14% volume growth on-year.
Internationally, the quarter was important for the company as Unilever decided to combine its foods business (including Knorr and Hellmann’s) with spice giant McCormick & Co. in a transaction valued at around $40-60 billion. However, the Indian entity is not included in the deal.
HUL shares are down 0.76% on the National Stock Exchange, compared with a 7.17% decline in the Nifty 50 Index since January. Of the 38 analysts tracking the stock, 23 have a “buy” or “strong buy” rating.
