Why did HUL Q3 FY26 results show a 121% rise in profit?

The increase in reported profit was mainly due to an exceptional gain from the ice cream demerger. The gain was treated as dividend income. Core profit from continuing operations declined 30% year-on-year.

What was the impact of the ice cream demerger gain?

The restructuring led to an exceptional gain of ₹4,485–₹4,611 crore. This boosted reported PAT significantly. However, it was a one-time item and not linked to regular operating performance.

How did EBITDA and margins perform in Q3 FY26?

EBITDA rose 3% year-on-year to ₹3,788 crore. However, EBITDA margin declined 70 basis points to 23.3%. The decline reflects cost pressures and business investments.

How did continuing operations profit change?

Continuing operations profit fell 30% year-on-year to ₹2,118 crore. This indicates pressure on underlying business profitability despite stable revenue growth.

How did HUL perform in the first nine months of FY26?

For April–December 2025, revenue rose 4% year-on-year to ₹48,117 crore. Reported PAT increased 47%, supported by the demerger gain. Core PAT from continuing operations declined 6%.

HUL Q3 FY26 Results: Profit Up 121%, Core PAT Falls 30%

HUL Q3 FY26 Results: Profit Jumps 121% on Demerger Gain, Core Margins Under Pressure

Ice cream business demerger boosts reported PAT, while continuing operations see margin compression and 30% profit decline

Team Sahi

Published: 12 Feb 2026, 04:01 PM IST (2 weeks ago)

Last Updated: 18 Feb 2026, 02:45 PM IST (1 week ago)

5 min read

HUL Q3 FY26 results show a sharp rise in reported profit, driven by a one-time gain, while core operating performance reflected margin pressure.

Hindustan Unilever Limited announced its results for the quarter ended December 31, 2025, on February 12, 2026. Reported net profit rose more than 120% year-on-year. However, the increase was largely due to an exceptional gain linked to the ice cream demerger.

The market reaction reflected this distinction. HUL shares slipped around 2–3% after the results, as investors focused on underlying earnings quality.

Key Financial Highlights – Q3 FY26

Hindustan Unilever earnings for the quarter show moderate revenue growth and a sharp rise in reported profit.

Metric	Q3 FY26	Q3 FY25	YoY Change
Revenue from Operations	₹16,235 crore	₹15,322 crore	+6%
Total Income	₹16,580 crore	₹15,788 crore	+5%
Reported PAT	₹6,603 crore	₹2,989 crore	+121%
Core PAT (Continuing Ops)	₹2,118 crore	₹3,027 crore	-30%
EBITDA	₹3,788 crore	~₹3,676 crore	+3%
EBITDA Margin	23.3%	24.0%	-70 bps
Basic EPS (Total)	₹28.12	₹12.70	Increase

Revenue grew 6% year-on-year. Total income rose 5%.
EBITDA increased 3%. However, EBITDA margin contraction of 70 basis points was recorded.
Reported profit after tax rose 121%. In contrast, continuing operations profit declined 30%.

Ice Cream Demerger Gain and Its Impact

The major driver of profit growth was the ice cream demerger gain.

The ice cream business was transferred to Kwality Wall’s India Ltd., effective December 1, 2025.

This restructuring resulted in:

Exceptional gain of ₹4,485–₹4,611 crore
Fair valuation benefit treated as dividend income
Boost to reported earnings

The gain was non-recurring in nature. It significantly lifted reported PAT for the quarter.

As a result, the gap between reported profit and core operating performance widened.

Segment-Wise Revenue Performance

Total segment revenue from continuing operations reached ₹16,441 crore. This represents 6% year-on-year growth.

Segment	Revenue (₹ crore)	YoY Growth
Home Care	5,887	+3%
Beauty & Wellbeing	3,930	+11%
Personal Care	2,370	+1%
Foods	3,689	+6%
Others (incl. Exports)	565	+6%

Beauty & Wellbeing recorded the highest growth at 11%.
Foods and Others grew 6%.
Home Care grew 3%, while Personal Care saw 1% growth.

Segment profit totaled ₹3,451 crore. Home Care and Beauty & Wellbeing contributed the largest share.

These numbers provide context within broader FMCG sector results in India.

EBITDA Margin Contraction and Cost Pressures

Although revenue increased, margins declined.

EBITDA margin fell to 23.3% from 24.0%.
The 70 basis points decline reflects cost pressures and business investments.

Key factors included:

Input cost pressures
Higher brand investments
Increased distribution spending

While EBITDA rose 3%, margin compression impacted profitability.

The decline in continuing operations profit highlights the pressure on the core business.

Why Did HUL Shares Decline?

Despite a 121% rise in reported PAT, the stock fell around 2–3% after results.

Investors focused on:

30% decline in continuing operations profit
EBITDA margin contraction
One-time nature of the ice cream demerger gain
Underlying profitability trend

Markets often differentiate between recurring earnings and exceptional items.

In this case, reported profit was boosted by restructuring gains rather than operating expansion.

Strategic Developments During the Quarter

HUL announced several strategic updates during the quarter.

Acquisition of the remaining 49% stake in OZiva
Exit from joint venture Nutritionalab (Wellbeing Nutrition)
Recognition of ₹113 crore liability due to new Labour Codes

These developments reflect portfolio realignment within the business.

The focus areas include premium and wellness categories.

9M FY26 Snapshot

For the period April to December 2025, performance trends were similar.

Revenue: ₹48,117 crore, up 4% year-on-year
Reported PAT: ₹12,048 crore, up 47% year-on-year
Core PAT (Continuing): ₹7,650 crore, down 6% year-on-year

The divergence between reported profit and continuing operations profit remained visible.

The ice cream demerger gain contributed to the rise in reported PAT.

Gap Between Reported and Core Earnings

The Q3 numbers show two distinct layers.

First, strong headline profit growth due to the exceptional gain.
Second, pressure on core profitability and margins.
Revenue growth remained steady at mid-single digits.
EBITDA growth was modest.
Core profit declined year-on-year.

This distinction is relevant when evaluating Hindustan Unilever earnings for the quarter.