HUL to focus on category growth, investment in high-growth brands
HUL’s Strategic Shift: Prioritizing Category Growth and Brand Investment in India
Hindustan Unilever Limited (HUL) announces a strategic pivot towards category growth, particularly in food and nutrition segments, while adjusting margin expectations to support volume expansion in the Indian market.
Strategic Margin Adjustment for Growth
Key Financial Metrics
- Revised EBITDA margin target: 22-23%
- Previous margin target: 23-24%
- Asia Pacific Africa growth: 2.0%
- India business growth: 3%
The FMCG giant has strategically adjusted its EBITDA margin expectations to prioritize volume growth, particularly in key categories. This move reflects HUL’s commitment to long-term market development over short-term profitability.
“In Asia Pacific Africa, our biggest region, the underlying sales growth of 2.0 per cent was also subdued. Our India business grew 3 per cent, driven by underlying volume growth in Home Care and Beauty & Well-being, while increasing market share during a period of modest market growth.”
– Fernando Fernandez, CEO, Unilever
India: A Key Market with Growth Potential
Market Tailwinds
- Government incentives
- Tax relief benefits
- Lower food inflation
- Reduced oil inflation
Unilever maintains a strong positive outlook on the Indian market, citing multiple favorable factors that could drive growth. The company’s confidence is backed by India’s consistent performance and market share gains over the past three years.
“India has been a consistent performer for us. It has been gaining shares for the last three years, and there is a lot to play for. We have strong positions in Home Care and Hair, where we will invest and accelerate.”
– Srinivas Phatak, Acting CFO, Unilever
Growth Strategy and Investment Plans
Key Focus Areas
- Horlicks revitalization program
- Adult nutrition market expansion (₹500 crore segment)
- Boost brand development in ready-to-drink format
- Geographical expansion initiatives
CEO and MD Rohit Jawa outlined the company’s comprehensive growth strategy, emphasizing the modernization of Horlicks to meet contemporary consumer needs and a significant push in the adult nutrition segment through enhanced medical marketing and chemist engagement.
Future Outlook
With a clear focus on category growth, strategic brand investments, and market expansion, HUL is positioning itself for sustained growth in the Indian FMCG sector. The company’s willingness to adjust margins for volume growth demonstrates its commitment to long-term market leadership.
Stay tuned for more updates on HUL’s strategic initiatives and market performance.
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