HUL confident of growth in FY26 amid improving demand, lower prices

Mint

5 days ago

New Delhi: Hindustan Unilever Ltd (HUL) expects demand conditions to improve over this financial year aided by broad monetary stimulus, lower food and crude inflation, and higher agricultural output, helping India's largest consumer goods company drive up its sales volume.
For fiscal year 2024-25, turnover surpassed ₹ 60,000 crore for the maker of Dove soaps and Kissan sauces and jams. The company reported a 2% increase in sales, a similar rise in volume growth, and a 5% growth in earnings per share (EPS). Profit for the fiscal year improved 5% to ₹ 10,644 crore.
'Looking ahead, we expect demand conditions to improve gradually over the next fiscal year,' Hindustan Unilever said in its annual report for 2024-25. 'Macro conditions will benefit from monetary stimulus, lower food and crude inflation and higher agricultural output. In this context, our focus remains on driving competitive volume led growth across our business.'
HUL said it had a 'strong conviction' in the significant mid- to long-term potential of India's fast-moving consumer goods (FMCG) sector, fueled by increasing affluence, substantial headroom for growth in per capita consumption, and rapidly developing digital infrastructure that enhances market access and consumer engagement.
HUL boasts a portfolio of more than 50 brands spanning 15 categories, including packaged foods, home care, and personal care, and reaching nine out of every 10 Indian households.
At 11.26am on Friday, the stock was down 0.22% at ₹ 2,362.55 on BSE, while the Sensex was down 0.24%.
In FY25, India's FMCG industry witnessed subdued demand in urban markets, although rural areas saw a gradual improvement in consumption. Commodity prices increased significantly, particularly in palm oil, tea and coffee, whereas crude oil, soda ash and skimmed milk powder were deflationary.
'Despite this, we maintained a healthy gross margin at 50.3%,' HUL said in its annual report.
'During the year, we continued to generate fuel for growth with our end-to-end net productivity programme across all the lines of the P&L leveraging buying efficiencies, smart formulations, driving logistics and manufacturing cost efficiencies, marketing efficiencies, net revenue management and accelerating simplicity through digital transformation,' the company said. 'We deployed the generated savings to build our brands and strategic capabilities, in line with our capital deployment strategy.'
In FY25, HUL segmented its portfolio into core, future core, and market makers portfolios to attract more customers.
The company has revamped core brands like Lifebuoy, Vim, and Lakmé, and launched more premium brands such as Liquid I.V. and Hellmann's Mayonnaise. It also acquired new-age personal care brand Minimalist for ₹ 2,955 crore, divested its water purifier business Pureit, and announced the demerger of its ice cream business.
'This year marked a significant transformation towards excelling in demand drivers for our affluent and aspiring consumers. Consumers now navigate across platforms creating a complex web of touchpoints and we aim to go where our consumers are,' Rohit Jawa, chief executive officer and managing director, HUL, said in the report.
'For instance, we have significantly boosted our investments in digital marketing—today 40% of our spends are on digital media. We have over 12,000 influencers whom we collaborate with for our brands,' Jawa added.
The company added that its core portfolio will focus on brands 'that are at the sweet spot of premiumisation'.
'We have continued to unlock access to these brands to a larger number of consumers by democratising trends, and as a result, grew faster than the market. We are building segments of the future through our market makers portfolio. While it is currently a smaller part of our business, it will continue to grow rapidly in the years to come. This Rs7,000 crore segment has delivered double-digit growth during the year, as we focus on expanding business,' the company said.
HUL also announced the acquisition of the palm undertakings of Vishwatej Oil Industries Pvt. Ltd and an investment in Lucro Plastecycle Pvt. Ltd, a maker of recycled plastics.