Rohit Jawa’s Day Zero as HUL MD & CEO, and the to-do list is a long one

Rohit Jawa, MD & CEO, Hindustan Unilever

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26 Aug, 2025 12:21

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If fortune favours the brave, Hindustan Unilever shareholders who have stayed put must be happy.

For a stock trading at 62 times its trailing earnings, the FMCG giant’s sales have compounded at only 8 percent over the last 10 years. But despite expensive valuations, shareholders who have held on are sitting on 4.5x returns today.

In the past decade, CEO and managing director Sanjiv Mehta steered India’s largest consumer company through several ups and downs. During Mehta’s tenure, the stock appreciated over 300 percent, from Rs 600 levels in October 2013 to Rs 2,600 now.

He led the ‘historic merger’ of GSK Consumer Healthcare with HUL, bringing Horlicks and Boost into its fold.

Torch passes on

On June 26, Mehta retired and passed on the torch to Rohit Jawa.

So today, June 27, marks Day Zero of Jawa’s tenure. When you are at the helm of a behemoth, expectations run high and the margin of error is little. We spoke to market participants to understand the tall tasks that await him.

Also Read: Underperformance in Nifty FMCG lurking around the corner?

Bringing back volumes

The Reserve Bank of India (RBI) has pointed out that higher retail inflation in the country has slowed down personal consumption expenditure, which, in turn, is leading to a moderation in corporate sales. HUL is also a victim of this.

Jawa takes over at a time when rural market volumes are still in the negative. In FY23, overall rural volumes, for the categories in which HUL operates in, declined 7 percent, while in Q4 FY23, the de-growth was ~3 percent.

The El Nino effect hitting rural spend further are also high possibilities, believe most analysts.

According to Nomura, there is some way to go before rural markets can come out of the woods. "Urban markets will continue to grow faster. While rural market demand is witnessing a better trajectory, it is still not out of the woods and the pace of recovery is gradual. We note the full benefit of the harvest money is yet to be seen, translating into product consumer demand," said Nomura.

As price-led top-line growth tapers off, the focus now turns to volumes. While rural slowdown has been a reality, other consumer companies have not seen as sharp a decline, which raises the question of why HUL is lagging its peers, especially smaller contenders.

The outperformers in terms of volume growth in Q4 were Nestle at 7 percent, Britannia at 12 percent and Tata Consumer at 8 percent, whereas HUL clocked 4 percent.

Premiumisation

HUL has managed to move consumers from detergent bars to powder to liquid and now even pods. In order to cater to Gen Z and beyond, the company needs to stay at the forefront of innovation and ramp up R&D spend.

“The disruption is actually happening outside the realm of mainstream companies, from the startup world,” said Dr Vikas V Gupta, smallcase manager and chief investment strategist, OmniScience Capital.

Especially in highly profitable categories like cosmetics and personal products, smaller brands have mushroomed, and are clocking high growth rates.

Emboldened by their online growth, they are also expanding their presence to offline channels. “Pharmacies and local stores are inundated with newer brands. So, the challenge is not only in the digital world, but also in HUL’s main turf,” adds Gupta.

While startups may be caught up in a funding winter, consolidation in that space will embolden the survivors to go for the kill, and the trend will accelerate. To keep up, HUL will have to devise a strategy to counter and orchestrate buy-outs.

The company has already entered the D2C space, with acquisitions of Love, Beauty and Planet, Acne Squad, Find Your Happy Place, Oziva and Wellbeing Nutrition. Experts believe these brands need to be scaled up aggressively to make a mark in the highly disruptive market.

Also Read: FMCG sector looks for focused hiring as it bets on growth

Growth in mature categories

According to BNP Paribas analysts, mature categories like hair oil and oral care have seen only 3-4 percent revenue CAGR over the last 7 years. “To us, this indicates growth challenges as penetration levels increase,” they added. HUL has Indulekha and Pepsodent brands in these categories.

Moreover, HUL already has over 95 percent penetration in some of its categories like detergents. “So distribution-led growth will be a challenge from here on,” believes Shirish Pardeshi of Centrum Broking.

HUL now has 19 brands with a turnover exceeding Rs 1,000 crore per annum. In FY22, this club had 16 members. In fact, Surf Excel became the first home and personal care brand in India to clock over $1 billion annual sales in FY23. As saturation settles in, all eyes are now on how other brands can be scaled up to these levels.

Jawa, who has been credited with transforming Unilever China and Unilever Philippines, surely has a tough task cut out for him. It is also perhaps the most exciting opportunity, as the funding winter may, in due course, present buy-out opportunities that may come handy in gaining presence in new, growing segments.

Jawa will need a multi-pronged approach to move the needle for HUL, and “win in many Indias”. The Street will be eagerly waiting for Jawa to articulate his strategy.