Hindustan Unilever sharpens focus on premium brands to maintain edge over rivals

Hindustan Unilever reported its Q1 FY25 net profit rose 3 percent on-year to Rs 2,538 crore.

With rural recovery still taking time to materialise, India's largest FMCG player Hindustan Unilever has turned its focus on selling more of its premium brands to buoy its bottom-line.

Our commitment to unlocking access to aspiration, market making & premiumization supported by our distinctive capabilities is a key driver of our competitive edge," CEO Rohit Jawa said In the earning call for the quarter ended June.

HUL's premium portfolio contribution has increased by around 300 basis points over the last 3 years, as consumers have become more discerning and more aspirational compared to the past. This has resulted in most of HUL's premium categories seeing faster volume growth compared to its mass-market peers.

HUL has reshaped its portfolio to focus on high growth spaces, such as skincare-infused make-up, international cuisine, or even home care liquids, such as fabric softeners or dishwashing liquids.

The first quarter of the current fiscal year was the first quarter wherein HUL reported its "Beauty & Wellbeing" and "Personal Care" segments separately, as they were a combined category earlier. The categories were separated due to their uneven growth and the competitive landscape.

The "Beauty" segment contributed Rs 3,199 crore to the topline, as compared to Rs 2,386 crore from the "Personal Care" segment. In the beauty segment, while the mass portfolio of the skin care and colour cosmetics declined, the growth momentum continued across premium skin portfolio and channels of the future.

Hindustan Unilever reported on Tuesday, 23 July that its Q1 FY25 net profit rose 3 percent year-on-year to Rs 2,538 crore from Rs 2,472 crores in Q1FY24, beating analysts estimates by a slight margin. The FMCG firm's total sales for the April-June quarter rose 2 percent on-year at Rs 15,523 crore.

Also Read | HUL Q1 results beat estimates, net profit up 3% at Rs 2,538 crore

A Moneycontrol poll of 9 brokerage estimates pegged HUL's fiscal first quarter net profit at Rs 2,512 crore, and revenue at Rs 15,205 crore.
HUL's Q1 earnings were expected to remain muted due to an intense heatwave hurting limiting sales, and price cuts taken during the quarter.

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