HUL Bets Big on 'New India' Growth

Hindustan Unilever (HUL) has announced an increased medium-term earnings before interest, tax, depreciation, and amortisation (Ebitda) margin target of 22-24%, up from the previous 22.5-23.5%. This strategic adjustment comes as the company aims to leverage the significant growth opportunities presented by 'new India,' characterized by its scale and rising per-capita consumption.

Over 85% of HUL's capital expenditure in the past five years has supported growth and savings. Looking ahead, more than 75% of future spending is allocated to these priorities, underpinning a capital allocation framework that includes portfolio reshaping towards high-growth segments and bolt-on acquisitions. The company reported a turnover of Rs 63,763 crore and an Ebitda margin of 23.6% in FY26.

The company's underlying sales growth has accelerated, rising to 10% in the June quarter of FY27. This improvement is attributed to sharper resource allocation and faster execution, particularly in quick commerce. HUL is disproportionately investing in premium brands, with over 60% of its advertising expenditure now directed towards digital platforms.

Home care, representing 37% of turnover, is a key focus area with significant growth potential driven by premiumization and format upgrades, such as a shift towards liquid detergents. HUL is also targeting underpenetrated categories and expanding established brands into new consumption occasions, with a strong emphasis on rural markets, which are growing 1.8 times faster than urban areas.

Quick commerce is a critical part of HUL's route-to-market strategy, with India's quick-commerce market projected to reach Rs 2 lakh crore by FY28. Beyond organic expansion, HUL is exploring portfolio extensions and acquisitions in areas like male grooming, skincare, and healthy snacking. The company is also integrating AI across various functions, including consumer foresighting and media optimization.