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Hindustan Unilever (HUL) management charted a volume-led growth strategy driven by increasing consumption

ICICIdirect Research 07 Sep 2026 DISCLAIMER

News: Hindustan Unilever (HUL) management charted a volume-led growth strategy driven by increasing consumption, premiumisation, market development and entry into new spaces over the medium term. It is shifting its strategy to ‘Winning in New India’ from ‘Winning in Many Indias’ in a bid to raise consumption. It aims to drive growth through mix of 40% from higher consumption and premiumisation, 40% from market making and 20% adding products in new spaces. To enable growth and productivity, the company plans to increase the capex to 3% of the turnover from 2% earlier to step up investments. It has tweaked the near-term EBIDTA margin guidance to 22-24% from 22.5%-23.5% earlier. HUL expects to unlock an incremental 500 basis points through a richer premium mix, operating leverage, a new multi-year cost-savings programme and AI-led media effectiveness. The savings are expected to create additional headroom for investments in priority areas such as premiumisation and market development. HUL also plans to invest 20 per cent of incremental turnover in new spaces as part of its portfolio reshaping strategy. Its distribution reach has expanded to 9mn outlets across India.

View: HUL has rolled out ambitious growth plan under the new leadership considering the current consumption trend, competitive environment, growing premiumisation and volatile input prices. The street will keenly monitor whether this change in strategy would help HUL to get back to double digit earnings growth from the current single digit. The company’s stock price has underperformed in last five year and will remain range bound unless there is consistent and substantial improvement in the earnings growth over the medium term.

Impact: Neutral

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