HUL Projects Volumes To Grow Ahead Of Pricing In FY26, Riding On Macro Tailwinds
The consumer goods giant has marginally lowered its margin guidance as it continues to step up investments in high-growth demand spaces.
The management of Hindustan Unilever Ltd. expects volume to bounce back, and grow ahead of pricing in the current fiscal, aided by favourable macroeconomic factors such as easing food inflation and interest rate cut.
"Macro triggers are positive, as we see food inflation coming down sharply and reduced interest rate will lower EMIs benefitting urban households, then softer crude oil will positively impact our economy, while monsoons have also been good after long period of difficult weather conditions," Chief Executive Officer and Managing Director, Rohit Jawa, told reporters on Thursday, during a briefing on the fourth-quarter earnings. "Therefore, we believe rural will remain robust while urban demand will start inching up over the next fiscal, aiding growth."
Much of the inflation-related price hikes have already been implemented. Now, the company plans to raise prices only in select categories like tea and skin cleansing, which continue to face higher input costs. Conversely, the home care category will see price reductions as benefits from lower commodity costs are passed to consumers. "On a net basis, however, we expect price growth to be in the low-single digit range in the current fiscal if commodity prices stay where they are, and as the year progresses our volume growth will be ahead of pricing," according to Chief Financial Officer Ritesh Tiwari.
Lowers Margin Guidance
With an eye on volume growth, the HUL management has slightly lowered its margin guidance to 22-23%, compared to previous guidance of 23-24%. This is on account of higher investments in high-growth demand spaces.
"We believe this is the right time to invest in shaping the future of FMCG in the country," Jawa said. "We have been going where the growth is despite the weak market conditions in the last few years. We have moved into faster growth spaces, categories of future. As macro tailwinds come in, we are best prepared for this term, and we feel confident in this point to invest for the future. We will ensure that our price value equation is absolutely on dot in order to improve our competitiveness further."
HUL is in the process of transforming its portfolio, with a strong focus on premiumisation. As part of this, it has renovated two-third of Pond's portfolio. It is now driving double-digit growth fueled by its Rs 1,500 crore portfolio in high-growth segments, the company said. The maker of Dove shampoo has seen a 200-basis points penetration increase in its Rs 3,500 crore liquids portfolio, on the back of three times media spends, versus rest of home care products.
Overall, the company spent 40% more towards influencer marketing in fiscal 2025 and doubled its assortment expansion in quick commerce channel.
