Jun 25, 2012, 01.32 PM | Source: Business Line

HUL's plan to enhance the Axe effect!

FMCG major Hindustan Unilever has positioned its premium deodorant Axe as the mother brand for all its male grooming products.

FMCG major Hindustan Unilever has positioned its premium deodorant Axe as the mother brand for all its male grooming products.

The company has recently entered the personal wash segment and in a span of six months this year launched two categories — body wash and soaps.

The company already has Axe in categories such as shaving cream, talcum powder and cologne for men. At present, grooming products for men account for 50% of the total skin, body and hair care market.

HUL's parent company Unilever has body-wash for Axe in other countries. However, India is the only country where the company has decided to launch bathing bars keeping in view the growing demand. Major players in the premium bathing bar category are Godrej’s Cinthol, Raymond’s Park Avenue and ITC's Fiama di Wills, that also has shower gels. HUL's Denim brand of body sprays also has been extended into bathing bars earlier.

In a bid to grow Axe master brand, it was important that Axe be present in all emerging youth-centric future formats such as shower gels and soaps. It is logical for the company to tap the growing men’s grooming opportunity in the body wash segment in India, said Mr Sudhir Sitapati, Category Head of Personal Wash.

“FY 11-12 was a very good year for the personal wash category not only for us but also for other industry players. The body wash category is 100 per cent penetrated in India but is a very small market and there is a huge opportunity for all. We are the market leaders in the body wash segment,” Mr Sitapati said.

According to Neilsen, the body wash segment in India is a mere Rs 44 crore and is growing at 46 per cent. HUL is the biggest player in this segment with a 36 per cent share with brands such as Lux, Dove, and Pears and now Axe.

“The extended categories will enhance the growth of the brand’s architecture as all categories have the same fragrance of bold and urban sex appeal like the mother brand Axe,” said Mr Subhobroto Chakraborty, Business Head, Genesis.

He further added that brand extensions have always been the strategy of HUL to have one brand at different price points and across categories to encircle the consumer.

“Such organic growth extensions will not dilute the mother brand’s core promise and work as an endorser,” he said.

HUL stock price

On November 26, 2015, Hindustan Unilever closed at Rs 813.10, up Rs 1.70, or 0.21 percent. The 52-week high of the share was Rs 979.00 and the 52-week low was Rs 744.00.

The company's trailing 12-month (TTM) EPS was at Rs 19.83 per share as per the quarter ended September 2015. The stock's price-to-earnings (P/E) ratio was 41. The latest book value of the company is Rs 17.21 per share. At current value, the price-to-book value of the company is 47.25.

READ MORE ON  Hindustan Unilever, Axe
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