HUL Deep Dive 2025: How Hindustan Unilever Makes Money (Business Model, Segment Breakdown & 5-Year Outlook)

Introduction: Why HUL’s Business Model Matters in 2025

Hindustan Unilever Limited (HUL) is India’s largest FMCG company, touching nearly every consumer category—from detergents to teas, skin care to nutrition. Yet, the company’s true strength lies in its business model: scale, distribution, premiumisation, and consistent category leadership.

This deep dive uses the FY25 Annual Report and Q2 FY26 management commentary to explain how HUL makes money, which segments drive margins, and what the next five years may look like. Similar to Asian Paints, HUL’s near-term performance is closely linked to India’s broader demand recovery trends

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1. The Business Model: How HUL Makes Money

HUL’s business model is built around high-frequency consumer products, strong brand recall, and a deep distribution network that reaches millions of retail outlets across India. However, it is important to note that large Indian conglomerates like Larsen & Toubro operate very different business models compared to FMCG companies. HUL’s operations are divided into four key segments—Home Care, Beauty & Wellbeing, Personal Care, and Foods & Refreshments. These together delivered ₹63,121 crore in FY25.

1.1 Home Care – ₹22,972 Crore Revenue | 37% of Business | 19% Margin

Home Care is HUL’s largest and most stable segment.

FY25 Performance:

• Revenue: ₹22,972 crore
• EBIT: ₹4,306 crore
• Margin: 19%

Q2 FY26 Highlights:

• Double-digit growth in liquid detergents
• Commodity deflation supporting margin expansion
• Fabric wash and household care volumes in mid-single digits

1.2 Beauty & Wellbeing – ₹13,073 Crore Revenue | 21% of Business | 32% Margin

This is HUL’s highest-margin portfolio, led by skincare, haircare, and the fast-growing Health & Wellbeing business.

FY25 Performance:

• Revenue: ₹13,073 crore
• EBIT: ₹4,176 crore
• Margin: ~32%

Growth Drivers:

• Strong traction for science-backed products
• Health & Wellbeing portfolio grew in triple digits
• High-single-digit growth in skin and hair care

1.3 Personal Care – ₹9,168 Crore Revenue | 15% of Business | 17% Margin

This includes skin cleansing, oral care, and deodorants.

FY25 Performance:

• Revenue: ₹9,168 crore
• EBIT: ₹1,606 crore
• Margin: ~17.5%

Q2 FY26 Highlights:

• Premium soaps delivered high single-digit volume growth
• Relaunches of Lux, Dove, and Pears improved mix
• GST transitions temporarily impacted turnover

1.4 Foods & Refreshments – ₹15,294 Crore Revenue | 25% of Business | 18% Margin

With a portfolio spanning tea, coffee, nutrition, ice creams, and condiments, this is a highly diversified segment.

FY25 Performance:

• Revenue: ₹15,294 crore
• EBIT: ₹2,808 crore
• Margin: 18%

Q2 FY26 Highlights:

• Tea and coffee saw high single-digit growth
• Lifestyle Nutrition returned to positive volume growth
• Food Solutions (HORECA) continued strong double-digit momentum

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2. Segment-Wise Contribution Summary (FY25)

Segment	Revenue (₹ Cr)	Share of Total	EBIT (₹ Cr)	Margin
Home Care	22,972	37%	4,306	19%
Beauty & Wellbeing	13,073	21%	4,176	32%
Personal Care	9,168	15%	1,606	17%
Foods & Refreshments	15,294	25%	2,808	18%
Others	962	2%	169	17%

Home Care + Beauty & Wellbeing together contribute:

• 58% of HUL’s revenue
• 62% of HUL’s profits

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3. HUL’s Structural Moats

3.1 Distribution Scale

• 9 million+ outlets serviced
• 1.4 million retailers on the Shikhar digital app
• 27 factories producing 80+ billion units annually

Distribution breadth is HUL’s strongest competitive advantage.

3.2 Pricing Power and Brand Trust

With leading brands across most categories, HUL maintains pricing power that helps drive mix improvement through premiumisation.

3.3 Supply Chain & Procurement Efficiency

Large-scale procurement of crude derivatives, palm oil, tea, and packaging gives HUL a structural cost advantage.

3.4 Category Leadership

HUL has leadership in detergents, dishwash, teas, skin cleansing, hair care, and nutrition—giving it pricing stability and strong cash flow.

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4. Financial Snapshot (FY25)

• Revenue: ₹63,121 crore
• EBITDA Margin: 23.7%
• Operating Cash Flow: ₹9,396 crore
• EPS: ₹45.30 (up from ₹19.95 in FY15)
• Dividend payout: 90%+

HUL remains a high ROCE, cash-generating FMCG business.

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5. 5-Year Outlook and Valuation Snapshot (2025–2030)

(Informational, not a recommendation)

To understand how we build multi-scenario valuation frameworks, you can refer to our earlier analysis of Persistent Systems

5.1 Base Case (8–9% EPS CAGR)

• Moderate rural recovery
• Margins stable near 23–24%
• Premiumisation continues at steady pace
  Projected FY30 EPS: ₹67–70

5.2 Realistic Case (10–11% EPS CAGR)

• Beauty & Wellbeing scales faster
• Cost efficiencies add 50–80 bps to margins
  Projected FY30 EPS: ₹72–76

5.3 Bull Case (12–13% EPS CAGR)

• Strong rural revival
• Faster digital adoption via Shikhar
  Projected FY30 EPS: ₹78–82

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Conclusion

HUL’s business model is built on scale, distribution, category leadership, and premiumisation. With strong segments, healthy margins, and consistent cash flows, the company is well-positioned for steady long-term earnings growth.

Understanding the composition of its business, segment engines, and financial drivers gives a clearer picture of how India’s largest FMCG company creates value and how it may evolve over the next five years.

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