Hindunilvr vs Asianpaint Q4 FY25

HUL reported FY25 revenue of INR 60,680 crore with 2% USG and 2% UVG, while PAT grew 5% to INR 10,644 crore. EBITDA margin contracted 30bps to 23.5% due to commodity inflation and stepped-up investments. Management guided for EBITDA margin of 22-23% for the next 2-3 quarters as they lean into growth, investing behind portfolio transformation, Channels of the Future, and innovation. Key drags remain Nutrition Drinks (Horlicks) and mass Skin Care (Glow & Lovely), though sequential improvement is noted. Risk: if demand recovery disappoints, the margin sacrifice may not yield commensurate volume growth.

Guidance read

EBITDA margin guidance of 22%-23% for next 2-3 quarters: Management expects EBITDA margin to be in the 22%-23% range for the next 2-3 quarters as they step up investments behind growth, before returning to modest expansion. First half of FY26 to be better than second half of FY25: Management expects growth trends to gradually improve in H1 FY26 due to improving macro conditions and internal portfolio transformation actions. Price growth expected in low single-digit range: If commodities remain at current levels, management expects price growth to be in low single-digit range for the near term. Gross margin expected to moderate further: Gross margin is expected to moderate due to commodity inflation and continued commitment to provide the right price-value equation to consumers.

Risk read

Key risks include Nutrition Drinks consumption decline — Horlicks and Boost face category headwinds with declining household consumption; price pack architecture changes may take time to yield results.; Gross margin pressure from commodity inflation — Inflation in palm oil, tea, and coffee not fully priced in, while deflation in crude oil is passed on quickly, creating a price-cost gap.; Increased price competition in Home Care liquids — Analyst raised concern about price-based competition in laundry; management acknowledged competitive actions but downplayed impact on margins.; Receivables at all-time high — Analyst noted receivables at an all-time high; management attributed to leaning in with credit to support distribution expansion, but risk of higher bad debts exists..

Promise ledger

Of 4 tracked promises, management 0 met, 0 close, 3 missed, 1 delayed.

Asian Paints reported a tough Q4 FY25 with standalone decorative volume growth of just 1.8% and value degrowth of -5%, reflecting weak demand and increased competition. Consolidated revenue declined -5.4% YoY, while gross margins improved to 44.9% (standalone) due to deflation and sourcing efficiencies. However, PBT margins slipped to 18.5% (standalone) and 17.2% (consolidated), below the guided 18-20% range. The company took impairment charges on White Teak (₹78.5 crore) and divestment losses in Indonesia (₹83.7 crore). Management guided for single-digit value growth in FY26 and reaffirmed the 18-20% EBITDA margin target, supported by backward integration and cost efficiencies. Key risks include sustained competitive intensity and geopolitical uncertainty.

Guidance read

Single-digit value growth for Asian Paints in FY26: Management expects single-digit value growth for the company in FY2026, driven by government spending recovery, mid-to-luxury housing demand, and rural demand. Maintain 18-20% consolidated EBITDA margin guidance: Management reaffirmed the 18-20% consolidated EBITDA margin guidance, supported by backward integration, cost efficiencies, and deflation benefits. White cement plant operational by June 2025: The 2.75 lakh ton white cement plant in Fujairah will be operational by June 2025, aiding backward integration and margin improvement. Futuristic emulsion plant partially operational by March-April 2026: A ₹3,000 crore emulsion plant (VAM/VA) will be partially operational by March-April 2026 and fully by April 2027, enhancing margins and product quality.

Risk read

Key risks include Sustained competitive intensity — New entrants like JSW and Indigo have intensified competition, potentially eroding market share and pressuring margins.; Weak demand conditions persist — Demand remains weak across decorative paints, with negative industry growth for the first time in two decades; recovery uncertain.; Home décor losses and impairment — Home décor businesses (kitchen, bath, White Teak) continue to incur losses, with White Teak impairment of ₹78.5 crore and regulatory headwinds.; Currency devaluation in international markets — AP Global business faced currency devaluation in Africa, impacting profitability; further devaluation could worsen results..

Promise ledger

Of 3 tracked promises, management 0 met, 0 close, 3 missed.