Shares of P&G Hygiene and Health Care fell as much as 5.5% following the company's disappointing Q1 FY27 results announcement on Wednesday, July 29. The stock reached an intraday low of ₹8,481 and was trading 3.6% lower at ₹8,647 as of 1:31 pm, according to CNBC TV18. The significant market reaction reflects investor concerns over the company's weak performance amid challenging market conditions. The stock has declined more than 33% so far in this calendar year, highlighting the sustained pressure on investor sentiment. Motilal Oswal has maintained a Neutral rating on the stock with a revised target price of ₹9,500, based on 35x March 2028 estimated earnings per share.
P&G Hygiene and Health Care reported mixed financial results for Q1 FY27, with net profit declining 34.3% to ₹126.3 crore compared to ₹192.1 crore in the corresponding quarter of the previous fiscal year, as reported by CNBC TV18. The company's revenue from operations declined 4.9% to ₹891.5 crore from ₹937 crore in Q1 FY26. The results indicate challenging market conditions affecting the hygiene and healthcare products manufacturer's performance during the quarter. Earnings before interest, tax, depreciation and amortisation (EBITDA) dropped 36.1% to ₹170.1 crore from ₹266.2 crore, while EBITDA margin contracted to 19.1% from 28.4% in the corresponding quarter last year. A lower tax expense partially cushioned the earnings decline, with tax outgo falling to ₹43.4 crore from ₹72.6 crore a year earlier. Motilal Oswal estimates EBITDA at ₹1.7 billion, significantly below the company's estimate of ₹2.7 billion, reflecting the challenging operating environment.
The company's revenue from operations of ₹891.5 crore in Q1 FY27 represents a slight decline from the ₹937 crore recorded in Q1 FY26, according to CNBC TV18. Sales for the quarter stood at ₹901 crore, down 5% from a year ago, showing the impact of challenging market conditions. This minimal revenue change suggests the company maintained its market position despite facing operational challenges during the quarter. The flat revenue performance contrasts with the significant decline in net profit, indicating potential margin pressures or increased costs during the period. The company attributed the profit decline to commodity cost fluctuations arising from geopolitical uncertainties and continued investments in innovation and advertising. Motilal Oswal notes that revenue growth was weak, with the business continuing to exhibit high quarterly performance volatility.
Gross margin contracted 630 basis points year-on-year and 470 basis points quarter-on-quarter to 57.3%, significantly impacted by commodity cost inflation due to geopolitical uncertainties, as reported by Motilal Oswal. Employee costs increased 12% year-on-year, while advertising and promotional spending jumped 21% year-on-year, reflecting the company's continued investment in brand building and market presence. Despite these raw material cost pressures, PGHH continued to invest in innovation and brand building, demonstrating management's commitment to long-term competitiveness. Other expenses declined 4% year-on-year, providing some cost relief. The EBITDA margin contracted 930 basis points year-on-year and 410 basis points quarter-on-quarter to 19.1%, highlighting the significant impact of cost inflation and strategic investments on profitability.
Managing Director Kumar Venkatasubramanian acknowledged the challenging environment while emphasizing the company's strategic approach. As reported by CNBC TV18, he stated that the company continues to invest strategically behind its brands, innovation and market capabilities, even as the geopolitical environment remains challenging. The company remains confident in its Integrated Growth Strategy, which focuses on a portfolio of daily-use categories where performance drives brand choice, alongside product and packaging superiority, productivity, constructive disruption, and an agile organisation. "We believe the continued execution of this strategy will strengthen our business, unlock future growth opportunities and build an even stronger company for the future," Venkatasubramanian added. The company markets brands including Whisper, Vicks and Old Spice in India and remains focused on strengthening its portfolio of daily-use health and hygiene products.
