Unilever India, a key player in the household and beauty sector, recently reported disappointing quarterly profits. The company’s net income for the quarter ending June 30 saw a modest increase of 2.8% to 25.4 billion rupees ($303 million), falling short of analyst expectations, which anticipated a profit of 26.01 billion rupees. This outcome highlights ongoing challenges rooted in sluggish consumer demand amid rising inflation and fickle shopping habits among urban consumers.

The overall revenue climbed by 1.6% to 151.7 billion rupees, yet this figure also disappointed analysts. The company’s volume growth, while improved at 4% compared to 3% a year prior, suggests an uneven market recovery. As India experiences hotter-than-usual temperatures, Unilever’s food and beverage segment has been directly affected, reflecting changing consumer priorities.

Rohit Jawa, the CEO, highlighted a gradual recovery in rural markets amid a temporary reduction in government welfare distribution. The home-care division, which contributes significantly to the overall revenue, showed a 4.6% growth, while beauty and personal care revenues declined slightly by 0.3%. The ongoing consumer trend toward niche and premium products continues to challenge Unilever’s traditional offerings.

Despite these hurdles, recent stock performance has shown resilience, with Hindustan Unilever shares rising 9.2% in the June quarter. Analysts anticipate heavy advertising expenditures from major companies like Unilever in the coming months, which could further impact profitability. As consumer preferences evolve, the company faces the vital task of adapting to maintain its market position in an increasingly competitive landscape.