- HUL plans Rs 2,000 crore investment in beauty and personal care over two years
- Focus on skin care, hair care, personal care, and home care liquids for growth
- Strategy targets premium, higher-margin segments with stronger pricing power
Hindustan Unilever Ltd (HUL) has announced a Rs 2,000 crore investment in its beauty and personal care (BPC) portfolio over the next two years, marking one of its most aggressive capacity expansion phases in recent years. The move signals a strategic pivot toward premium, higher-margin categories even as the broader FMCG sector navigates uneven demand trends.
Historically, HUL's annual capital expenditure has hovered between 1.5% and 2.5% of revenue. This fresh commitment suggests a more concentrated allocation strategy - fewer but significantly larger bets - aimed at strengthening manufacturing capabilities in high-value segments.
Where the Money Is Going
The investment will prioritise skin care, hair care, personal care and home care liquids - segments where premiumisation and innovation are driving growth. These categories not only command better margins but also offer stronger pricing power compared to staples.
Industry observers see the move as a signal that HUL is positioning itself to capture rising urban demand for specialised beauty formats and liquid-based home care products, which are witnessing structural shifts from bars and powders.
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A New Phase Under Priya Nair
The capex announcement also reflects evolving priorities under CEO Priya Nair's leadership. The strategy appears to combine a stronger push for volume-led growth with sharper premiumisation. After a period of muted volume expansion across the sector, the renewed focus on scaling beauty and personal care suggests HUL is seeking to drive both topline acceleration and margin expansion simultaneously.
The emphasis on building capacity ahead of demand also indicates management confidence in a recovery in consumption trends.
Brokerage View
Brokerage firm Nuvama has maintained a 'Buy' rating on HUL, arguing that the stock is attractively valued at 44x and 40x FY27 and FY28 earnings, respectively. It notes the stock appears oversold and could benefit from anticipated inflows into FMCG names.
Nuvama also expects a continued recovery in HUL's volume trajectory, which, combined with focused investments in premium segments, could support earnings growth over the medium term.
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