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Hindustan Unilever (HUL) indicated that Q1FY27 witnessed elevated input cost pressures

ICICIdirect Research 01 Jul 2026 DISCLAIMER

News: As per Chairman’s speech in AGM, Hindustan Unilever (HUL) indicated that Q1FY27 witnessed elevated input cost pressures following the West Asia conflict, with crude oil briefly crossing US$100/bbl, leading to higher commodity inflation across its FMCG portfolio. Management noted that while crude prices have moderated, commodity cost inflation will take time to normalise, keeping near-term margins under pressure. HUL reiterated that it aims to keep price increases lower than the rise in input costs by driving cost efficiencies, although calibrated price hikes have been implemented to offset higher raw material costs. The company expects short-term volatility to persist but believes its local sourcing strategy and supply chain initiatives position it well to navigate the inflationary environment.

View: The elevated commodity cost pressures in Q1FY27 are broadly in line with our expectations, as companies continue to carry higher-cost inventory. With crude oil prices easing from recent highs, input cost pressures are expected to moderate from H2FY27. However, the monsoon remains a key monitorable, with rainfall currently expected at ~90% of the Long Period Average (LPA) in 2026. A prolonged deficit could impact kharif sowing, keep food inflation elevated, and weigh on both rural and urban consumption, thereby affecting consumer demand and volume growth in H2FY27.

Impact: Neutral

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