FMCG major HUL has identified six long-term bets and said it sees potential of 2-4x growth across key categories, sharing the presentation of its Capital Market Day with analysts on November 29. Shares of HUL are higher by over 1.5% in mid-day trade.
The company aims to achieve double digit EPS growth, driven by topline, with over 80% of the delta coming from 'future core and market maker' products, it said. The 'future core' are brands that the companies says are at the sweet spot of premiumisation, such as Surf Excel, Vim, Dove, Ponds. 'Market makers' are products that are the leading trends in the market.
In beauty and wellness along with food & refreshments category, the company sees 'headroom for premiumisation.'
The categories that are seeing volume-led growth include skin care, hair care, laundry, lifestyle nutrition and tea. In these businesses, HUL said the company has significant market leadership, and multi-fold scale compared to the second largest player. The hair care segment for HUL has seen very strong market share, with 3x growth in hair care relative market share compared to the nearest rival.
In terms of long-term opportunities, HUL has set its sight on categories like premium face wash and body wash, hair care, home care and condiments, along with prestige & well-being category. These are multi-year markets in the making, and seeing high double-digit growth, HUL said.
The company said it sees potential of more than 100 bps of savings through efficiencies and improved productivity, which it says should 'future-proof' its existing moats.
In the social media era, the company's TV advertisement spend has fallen from 60% to 39%, with ad spend on OTT category doubling to 17%, and digital video spend has risen from 20% to 29%. The increasing share on digital media contribution shows that the age of influencers is firmly here.
HUL also talked about the Winning in Many Indias (WIMI) 2.0 strategy, which will move towards identifying 'affluent agglomerations' spread across various parts of India, from 16-socio economic clusters. The WIMI plan was launched in 2014 to classify India in 16 clusters based on economic profile of consumers.
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