HUL targets 22-24% Ebitda margin, plans capex hike to 3%

Hindustan Unilever Ltd (HUL) is targeting an Ebitda margin between 22% and 24% in the medium term. The FMCG giant also plans to raise its capital expenditure to 3% of turnover, up from a steady 2% over the past five years, to enable growth and productivity and capture the "New India opportunity".

CEO Priya Nair outlined the strategy during a Capital Markets Day 2026 presentation for institutional investors and financial analysts. The company, which reported revenue of Rs 63,763 crore for FY26, is focusing on cost management. Its current Ebitda margin stands at 23.6%, a decline of about 70 basis points year-on-year.

Growth and margin strategy

Nair stated HUL aspires to "volume-led profit growth" and is "shaping the portfolio structurally towards higher margins". A wider product range provides flexibility to invest for growth, she explained. The company aims to unlock an incremental 500 basis points, equivalent to 5% of total revenue, to deploy into priority areas like premiumisation and market development.

This unlock will come from a richer premium product mix, operating use, a new multi-year cost-savings programme, and AI-led media effectiveness. Nair acknowledged that HUL's "growth has been muted in the last two years amidst a challenging operating environment." She added that decisive actions taken over the past year are resetting the company for stronger performance.

Portfolio reshaping and investments

As part of its portfolio strategy, HUL will invest 20% of its incremental turnover into new business spaces. The plan involves pivoting towards "high growth spaces" by extending existing brands, introducing new "brands from Unilever", and pursuing strategic "Bolton acquisitions" to enter new categories.

The company has already made moves to sharpen its focus. It has acquired Minimalist and OZiva to scale its Beauty & Wellbeing portfolio. Conversely, it sold Pureit, demerged its Ice Cream business, and divested Nutritionalab. HUL, part of Unilever Plc, owns 21 brands each with a turnover exceeding Rs 1,000 crore, selling 85 billion packs annually through 9 million outlets.

The New India opportunity

Nair framed the increased investment within "the New India opportunity." She said India's consumption story is just getting started, noting the economy has climbed from the world's tenth largest in 2014 to sixth in 2026. It is projected to become the third largest by 2030.

Concurrently, the number of households is expected to rise from 293 million in 2018 to 386 million by 2030. HUL's underlying sales growth (USG) has shown a progressive step-up over recent quarters, moving from 3% to 10% across the last four reporting periods on a sequential basis. The company has "continued to strengthen competitiveness," Nair concluded.