Quarterly Face-Off: Colgate-Palmolive vs HUL – Which FMCG Giant Outperformed in Q1 FY26?

Introduction

With Q1 FY26 now concluded, investors are actively analyzing key performance indicators to pinpoint leading players within the FMCG sector. Among the most talked-about contenders are Colgate-Palmolive (India) Ltd. and Hindustan Unilever Ltd. (HUL)—two consumer goods giants known for their enduring brand presence and stable financials. While both companies operate in similar segments—personal care, oral hygiene, and household essentials—their growth strategies, market penetration, and quarterly earnings present a nuanced story of divergence.

This article delves deep into the April–June 2025 quarterly results of both companies, comparing their revenue growth, profit margins, and operational efficiency to uncover which stock currently holds the upper hand. Drawing insights from recent financial disclosures and market sentiment, we aim to help investors make a more informed call in the ever-competitive FMCG sector.

FMCG Industry Overview

India’s FMCG sector continues to grow steadily, supported by rising consumption, rural expansion, and digital adoption. Sales rose 10.6% in Oct–Dec 2024, with rural demand outpacing urban growth at 9.9% versus 5%. The average rural FMCG basket size has grown significantly, highlighting deeper market penetration. Meanwhile, India’s online grocery industry is anticipated to expand significantly—from USD 4.5 billion in 2022 to USD 76.8 billion by 2032—driven by the accelerating adoption of e-commerce and quick-commerce services.

 

Hindustan Unilever Ltd: Company Overview

HUL operates across home care, personal care, and foods & refreshment segments with over 50 brands. In FY25, the company saw 45% growth in e-commerce sales and expanded its quick-commerce reach. With a strong rural and specialty store network, HUL continues to scale through premium offerings and digital-first strategies.

 

Colgate-Palmolive (India) Ltd: Company Overview

Colgate holds a strong leadership position in the oral care segment, backed by 83% consumer trust and product advancements such as its arginine-infused toothpaste formula. The company doubled its rural village reach and executed D2D campaigns to over 4.4 million homes, boosting brand penetration by 33% in key geographies. Its focus remains on product innovation and deep rural engagement.

 

Quarterly Financial Snapshot (April–June 2025)

Comparative Table: Q1 FY26 Performance

Here’s how Colgate-Palmolive and Hindustan Unilever stack up against each other on key financial metrics from the April–June 2025 quarter:

 

Revenue from Operations

In the first quarter of FY26, both FMCG giants displayed contrasting topline movements. Colgate-Palmolive reported a slight decline in its operating revenue, falling to Rs. 1,42,064 lakhs from Rs. 1,48,576 lakhs in the same quarter last year. The softness in demand—especially in the oral care segment—paired with price stagnation, weighed on sales. In contrast, Hindustan Unilever delivered a revenue of Rs. 16,323 crores, reflecting a steady growth of 5% year-on-year. Its broader product portfolio and volume-led growth across categories like home care and personal products helped drive momentum. While Colgate showed signs of a slowdown, HUL’s numbers demonstrated its ability to sustain growth even in a moderately challenging consumer environment.

 

Total Income

A look at the total income reveals a continuation of the divergence between the two companies. Colgate-Palmolive's total income slipped to Rs. 1,45,200 lakhs from Rs. 1,52,011 lakhs, underlining weakness in ancillary revenue streams as well. With limited non-operating contributions and lower other income, the topline pressure became more pronounced. On the other hand, Hindustan Unilever reported total income of Rs. 16,715 crores, up 4.7% from the year-ago period. The consistent growth reflects efficient revenue capture across verticals and the benefit of scale. Overall, HUL managed to protect its topline across channels, while Colgate witnessed a clear tapering.

Net Profit

The bottom-line story diverged even further. Colgate-Palmolive reported a significant year-on-year drop of 11.91% in net profit, falling to Rs. 320.62 crore. The fall was driven by lower sales, squeezed operating margins, and increased spending on marketing and distribution. In contrast, HUL posted a net profit of Rs. 2,732 crores, recording a healthy 7.64% annual growth. Margin discipline, improved cost efficiency, and a favorable tax impact helped HUL deliver this performance. Despite Colgate’s larger net profit in absolute terms, the shrinking trend versus HUL’s steady growth makes the difference quite evident.

 

Operating Profit / EBITDA

Colgate’s estimated operating profit (EBITDA) stood at Rs. 470.51 crore, reflecting strain on its operating efficiency. The company faced input cost inflation and was unable to fully pass it on to consumers, leading to pressure on margins. Meanwhile, Hindustan Unilever (HUL) reported a consolidated EBITDA of Rs. 3,718 crore, slightly lower than the previous year, but still maintaining a solid EBITDA margin of 22.8%. Although HUL experienced a 130 basis point margin compression, its absolute EBITDA performance remained resilient due to strategic portfolio management. While both companies encountered margin headwinds, HUL demonstrated stronger operational discipline and was more successful in defending its profitability compared to Colgate.

 

Earnings Per Share (EPS)

In terms of earnings per share, Colgate reported Rs. 11.79 while HUL came in slightly lower at Rs. 11.73. However, the higher EPS for Colgate came despite a notable profit decline, which may not reflect future earnings strength. HUL’s EPS, though marginally lower, is backed by stable net profit growth and stronger revenue consistency. For investors, the trend matters more than the static figure, and in this case, HUL’s EPS indicates sustainability, while Colgate’s reflects past earnings strength rather than current momentum.

 

Summary Table: Who Performed Better?

 

Stock Market Reaction

Investor sentiment following the Q1 FY26 results reflected the market's confidence in Hindustan Unilever's stability and Colgate's relative weakness. In the days immediately after the result announcements:

• Hindustan Unilever’s stock saw a modest uptick, supported by steady earnings and expectations of stronger festive demand in the coming quarters. Analysts viewed HUL’s broad-based segment performance as a reassuring signal amid sector-wide inflation pressures. Brokerage reports cited the company's margin management and recovery in rural demand as positive triggers going forward.

• Colgate-Palmolive’s share price, on the other hand, witnessed a muted to slightly negative reaction as the market responded to the decline in revenue and profit margins. The lack of volume-led growth and pressure on core earnings raised caution among investors. Several analysts downgraded short-term expectations, citing concerns about market saturation in oral care and rising competition from local and natural brands.

 

Valuation & Stock Performance Comparison

Hindustan Unilever's stock is trading at Rs. 2,554.00, well within its 52-week range of Rs. 2,136.00 to Rs. 3,035.00, reflecting relative price stability. Despite broader market volatility and cost pressures, HUL has maintained a relatively stable price band. This indicates investor confidence in its long-term prospects and earnings visibility. The company trades at a P/E ratio of around 60x, justified by its diversified portfolio, leadership across segments, and consistent profit growth.

In contrast, Colgate-Palmolive (India) Ltd. is trading at Rs. 2,258.00, hovering very close to its 52-week high of Rs. 2,286.50 and not far above its 52-week low of Rs. 2,240.70. This narrow trading range highlights limited upside movement and suggests cautious investor sentiment following the company's subdued Q1 results. With a P/E ratio in the 45x–50x range, the stock is still expensive relative to earnings, especially considering the recent decline in net profit and flat volume growth. In the absence of clearer signs of recovery, Colgate could face challenges in gaining strong re-rating momentum from the market.

Key Drivers Behind the Numbers

This quarter, performance was influenced by how well companies could navigate volume recovery and input cost inflation. Firms with diversified product portfolios and broad rural outreach benefited from modest demand rebounds, particularly in essential categories like detergents, tea, and personal hygiene. Price hikes taken in previous quarters helped protect margins despite inflationary pressures. For brands focused on a narrower set of products, particularly oral care, limited pricing flexibility and sluggish urban growth made it harder to maintain profitability.

Product innovation and targeted promotional campaigns also played a role. New product launches in premium and value segments helped capture evolving consumer preferences. Meanwhile, improved rural distribution networks and supply chain efficiency provided tailwinds to companies that had invested in expansion beyond metros and Tier 1 cities.

 

Risks and Challenges Ahead

Although known for its stability, the FMCG sector is still grappling with several ongoing challenges. Raw material inflation—especially in categories like palm oil, packaging, and dairy inputs—remains a major pressure point. While pricing strategies have cushioned the blow, sustained cost escalation could erode margins in future quarters.

Consumer behavior shifts and emerging competition from natural, regional, and D2C brands are also altering market dynamics. Established players must now balance innovation with cost efficiency to retain market share. Regulatory compliance, particularly in labeling, sustainability, and advertising, adds another layer of complexity.

Moreover, rural demand remains inconsistent, influenced by weather patterns, inflation, and government spending. Without a strong revival in rural and discretionary consumption, some segments may continue to underperform.

Conclusion: Who Wins Q1 FY26?

Colgate-Palmolive and Hindustan Unilever remain two of the most influential players in India’s fast-moving consumer goods sector, each with distinct strengths. While one showcased leadership in revenue growth, portfolio breadth, and consistent earnings, the other delivered stronger metrics in net profit margins, EPS, and operational efficiency. The Q1 FY26 results clearly highlight that both companies are navigating market dynamics differently—one through diversification and scale, the other through category dominance and profitability.

In the end, the better investment choice comes down to individual investor goals. Those prioritizing stability and diversified exposure may lean one way, while those seeking margin strength and focused category leadership may prefer the other. As always, aligning stock selection with personal risk tolerance, return expectations, and long-term strategy remains key to sound decision-making.

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Frequently Asked Questions

1. Which FMCG company had better growth in Q1 FY26?

Growth varied by company—some showed steady top-line gains, while others faced pressure due to slower volume recovery and margin compression.

2. What were the key challenges for FMCG companies this quarter?

Raw material inflation, competitive intensity, and muted rural demand were the major hurdles affecting quarterly performance.

3. Is this the right moment to consider investing in FMCG stocks?

If you’re looking for stability, FMCG remains a defensive play, especially for long-term investors. Diversified players may offer better consistency.

4. How can I invest in FMCG stocks easily?

You can open a free Demat and trading account with Enrich Money and start trading in FMCG and other sectors with real-time data, research tools, and zero hidden charges.

 

Disclaimer:  This blog is dedicated exclusively for educational purposes. Please note that the securities and investments mentioned here are provided for informative purposes only and should not be construed as recommendations. Kindly ensure thorough research prior to making any investment decisions. Participation in the securities market carries inherent risks, and it's important to carefully review all associated documents before committing to investments. Please be aware that the attainment of investment objectives is not guaranteed. It's important to note that the past performance of securities and instruments does not reliably predict future performance.