The FMCG major plans higher investment in core businesses, premiumisation and emerging categories while targeting stronger cost savings and AI-led marketing efficiency
Hindustan Unilever (HUL) plans to raise productive capital expenditure to 3 per cent of turnover from around 2 per cent, stepping up investment to drive long-term, competitive and volume-led profit growth.
The consumer goods major outlined the strategy in its Capital Markets Day presentation filed with the stock exchanges on Friday. HUL’s total capital expenditure towards growth and savings averaged around 2 per cent of turnover over the past five years. The company reported annual turnover of Rs 63,763 crore in FY26.
HUL also plans to enter select high-growth categories where it sees sustainable growth, attractive profit pools and a strong competitive position. The company identified male grooming, masstige skincare, fragrances, vitamins and minerals, healthy snacking, protein, hydration, ready-to-drink products and functional deodorants as key opportunities.
Masstige skincare refers to products that combine high-end ingredients with relatively affordable pricing.
The company reiterated that volume-led growth will remain a central part of its strategy. It plans to expand category growth through four levers — increasing consumption through greater usage, accelerating premiumisation through additional benefits, developing under-penetrated segments to bring in more users and entering new categories.
HUL said its premium brands receive twice the investment of the rest of its portfolio.
Portfolio Reshaping
The company has been streamlining its portfolio by exiting non-core businesses. This includes the sale of Pureit, the demerger of its ice cream business and the divestment of Nutritionalab. At the same time, HUL has expanded into newer consumer segments through acquisitions, including plant-based nutrition brand Oziva and science-led skincare brand Minimalist.
The company has set a target to generate 500 basis points of ‘fuel’ for reinvestment into its core growth pools. It also plans to grow its most profitable premium lines 50 per cent faster than its core everyday products.
A new multi-year programme will focus on modernising operations and deploying advanced product formulations, with the company targeting cost savings one percentage point above historical levels.
AI Push In Marketing
HUL expects artificial intelligence to improve media effectiveness by more than 10 per cent by transforming content creation and enabling real-time optimisation of return on investment (ROI). The strategy comes after HUL reported a 10 per cent rise in revenue to Rs 17,341 crore in the April-June quarter of FY27, marking its highest revenue growth in 13 quarters. The growth was supported by higher sales and price increases.
Earnings before interest, taxes, depreciation and amortisation (Ebitda) margin stood at 23 per cent, down 40 basis points from the year-ago quarter. HUL shares touched a 52-week low earlier this week. The stock was trading 26.04 per cent lower than a year ago on the National Stock Exchange, compared with a 3.20 per cent decline in the benchmark Nifty 50 over the same period.
