Hindustan Unilever CFO Sees Rural Demand Shift Dramatically, Bets Big On Beauty & Wellbeing

Rural India is witnessing a major shift in consumption patterns, according to Hindustan Unilever Ltd. Chief Financial Officer Ritesh Tiwari.

"Rural consumption habits are dramatically changing," he told NDTV Profit in a televised interaction, while speaking on the evolving dynamics of the FMCG market. Tiwari suggested that shifts in preferences and access are opening up new opportunities in the hinterland.

HUL, which operates in one of the most competitive consumer markets—opposite multinationals, listed peers, regional brands, and digital-first D2C players—has managed to add 200 basis points of market share in the last two years. "Our portfolio straddles across the price pyramid, from premium to mass. This helps us compete across channels and competition," Tiwari noted.

"We take large brands and enter into more demand spaces—like Vaseline is now in the sun care space," Tiwari said. The beauty market in India is fragmenting, and Tiwari believes that with rising income levels, categories like skincare are poised for growth.

Macro Tailwinds Strengthen Demand

Tiwari painted an optimistic macro picture for the FMCG sector, driven by several favourable indicators: a good agricultural outcome from both kharif and rabi crops, softening food inflation, monetary easing, and tax relief. "Looking at headline commodities like crude, they've also come off peaks," he said.

He expects these improving macro conditions to support consumption. "We believe the first half of fiscal 2026 should be better than the second half of fiscal 2025,” he added.

Organised trade is growing faster than general trade, prompting HUL to pivot its investments accordingly. The company is doubling down on modern trade and quick commerce, and even though the latter currently contributes only around 2%, it's "growing rapidly," Tiwari said.

The company maintains a more than 90% dividend payout ratio and occasionally pays special dividends. Return metrics remain robust, with a target to maintain return on capital employed above 100% and improve return on equity by 100–200 basis points.

Looking ahead, HUL is targeting double-digit EPS growth over the medium to long term, supported by modest margin expansion and strategic capital deployment. He also confirmed that the demerged ice cream business will list separately, maintaining a 1:1 demerger ratio. The ice cream unit is a high-growth, high-capex, low-margin business, said Tiwari, and the company plans to continue investing in its expansion.