Hindustan Unilever Limited to separate its ice cream business

Hindustan Unilever Limited (HUL), on the sidelines of its Q2 FY25 results, said that it would separate its ice cream business. The decision to move forward with this segment was made following a comprehensive assessment by a committee of Independent Directors. This committee was responsible for determining the optimal direction for this sector.

In a statement filed with the exchange, the company highlighted the ice cream category as a high-growth market that contributes around 3% to HUL's total revenue. To fully unlock the potential of this market, significant investments are needed.

As Unilever possesses the trademarks and expertise in this area and has announced the separation of its ice cream business, local capabilities will need to be developed to ensure the continued operation of the Business.

The company said the ice cream business operates under a unique model that includes specialised cold chain infrastructure and a distinct channel landscape, which limits potential synergies with the rest of HUL’s operations.

The company's restructuring aims to prioritise HUL's core business areas and expand its footprint in growing sectors like Beauty, Foods, Health, and Wellbeing. By divesting the ice cream business, HUL will provide greater flexibility and focus for that segment, ultimately optimizing value for shareholders.

HUL's Q2 results

Hindustan Unilever (HUL), a prominent FMCG company in India, experienced a decrease in consolidated net profit during the September quarter of FY25. The net profit for this period was Rs 2,591 crore, marking a 2.4% decline compared to the same period in the previous financial year.

Despite this, the company saw a 3% growth in underlying volume. In its earnings release, the company attributed the decline in profit to a one-time indirect tax credit received in the corresponding period of the previous year, which had positively impacted both revenue and profit in the Beauty and Wellbeing segment.

The FMCG major’s revenue increased by 1.9 per cent year-on-year (Y-o-Y) to Rs 15,926 crore. Its profit before interest, depreciation, and tax (PBIDT) increased by 0.7 per cent in the July-September quarter, reaching Rs 4,006 crore.

Sequentially, HUL’s revenue was up 1.4 per cent, while its net profit declined by 0.7 per cent.

“In the September quarter, FMCG demand witnessed moderating growth in urban markets while rural areas continued to recover gradually. In this context, we delivered a competitive and profitable performance,” said Rohit Jawa, managing director and chief executive officer at HUL.