Industry Odisha Bureau, Sep 05: Hindustan Unilever aims to revive growth after two muted years. The company is increasing capital expenditure and reinvesting savings. Brands, distribution and new categories will receive greater investment. Premiumisation and consumption remain central to this growth strategy.
Capital expenditure will rise to 3% of turnover, up from 2%. More than 75% of that spending targets growth and savings. CEO Priya Nair announced this at HUL’s Capital Markets Day. The shift signals a move beyond pure cost-cutting measures.
HUL is pursuing 500 basis points of “fuel for growth”. CFO Niranjan Gupta said this combines margins, efficiencies and savings. These gains will be redeployed into product and packaging investments. Media, sampling, pricing and channel investments are also included.
The company has set a medium-term EBITDA margin target of 22-24%. FY26 EBITDA margin already stood at 23.6% currently. HUL wants savings generated beyond relying solely on cuts. Operating leverage should improve as revenue outpaces fixed-cost growth.
Nair’s strategy rests on four distinct growth pools identified. These are consumption, premiumisation, category expansion and new spaces. Consumption and premiumisation will each drive 40% of incremental turnover. New spaces are expected to contribute the remaining 20%.
HUL, often seen as a consumer-demand proxy, is repositioning brands. It is betting on shifting consumer preferences within its portfolio. Premium brands now receive twice the investment of non-premium brands. Digital channels account for more than 60% of media spending.
In beauty and wellbeing, HUL sees room in bodywash, skin cleansing. Functional deodorants represent another growth opportunity, executive director Harman Dhillon said. Low current usage and changing Indian lifestyles support this expansion. The company plans dedicated investment in developing this specific category.
Foods executive director Rajneet Kohli outlined a similar repositioning approach. Horlicks is shifting toward lifestyle nutrition, emphasizing superfoods and protein. The broader foods strategy includes premiumisation and functional nutrition offerings. Convenience and ready-to-drink beverages also feature in these plans.
HUL’s approach blends efficiency gains with sustained reinvestment going forward. Savings now function as fuel rather than pure cost reduction. Success will depend on translating premiumisation and new categories into HUL’s targeted growth across brands, distribution and its broader Indian consumer portfolio.
