One of India's largest fast-moving consumer goods companies Hindustan Unilever Ltd (HUL) flagged an improving consumption environment on a sequential basis, as demand trends have shown positive signs of growth. "We are seeing encouraging macroeconomic conditions," said CEO Rohit Jawa in the post-earnings analyst call on July 31.
He added that the Reserve Bank of India has reduced repo rate by 100 basis points since January 2025, injecting greater liquidity into the system. Retail inflation has moderated to 2.1 percent as of June, its lowest level since 2019.
This, along with the recent income tax relief measures, are expected to positively impact disposable income and consumer sentiment. Additionally, the Indian Met Department forecast of an above-average monsoon bodes well for rural demand.
"Collectively, these tailwinds are helping to sustain the gradual recovery in consumption demand in the country. Consequently, consumption demand trends for last three months reflected a sequential improvement. However, at a MAT level, the consumption environment remained stable, with rural demand continuing to grow ahead of urban demand," added HUL.
HUL added that it is seeing tangible results from its strategic shift towards future-core categories and market-making segments, marking a significant transformation in its portfolio. Over the past two years, the company has recorded an estimated 500 basis points shift in this direction, driving a more resilient and consistent growth path.
Despite a subdued consumption environment, HUL has maintained mid-single-digit volume growth for five consecutive quarters. The company attributes this performance to its disciplined execution, strategic choices, and focus on strengthening key categories such as laundry, skin cleansing, and hair care. HUL also noted a recovery in market share, particularly after the temporary dip observed during the deflationary cycle.
Looking ahead, the company expects the first half of the current financial year to perform better than the latter half of the previous one. If commodity prices remain stable, HUL anticipates low single-digit price growth. It remains committed to improving gross margins sequentially, with a plan to reinvest those gains across the profit and loss statement.
"We will sustain investments across the P&L, particularly in channels of the future, multi-year market-making platforms, and strategic capabilities needed for portfolio transformation," the company said.
HUL expects its EBITDA margin to remain in the 22 to 23 percent range and remains focused on driving competitive, volume-led growth across its portfolio by continuing to invest in brands and strategic priorities.
Hindustan Unilever Ltd (HUL) on Thursday reported a 6 percent year-on-year rise in consolidated net profit to Rs 2,768 crore for the quarter ended June 2025, aided by lower tax expenses and volume-led sales growth across key categories.
Revenue (total sales) grew 5 percent to Rs 16,323 crore, with underlying volume growth (UVG) at 4 percent and underlying sales growth (USG) at 5 percent, HUL said in a stock exchange filing.
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