HUL targets growth with capex hike and brand

Hindustan Unilever (HUL) is betting on cost efficiencies and a renewed brand push to revive its growth after a muted two-year period. Managing director and chief executive Priya Nair outlined the strategy at the company's Capital Markets Day event.

The country's largest consumer goods company plans to increase its capital expenditure to 3% of turnover, up from 2%. More than 75% of this increased spending will be directed towards growth initiatives and savings, Nair said.

Chief financial officer Niranjan Gupta stated HUL is targeting 500 basis points, or 5.0 percentage points, of "fuel for growth". This will come from a combination of improved margins, operating efficiencies, and savings. The company intends to redeploy these gains into areas like product and packaging, media and sampling, pricing architecture, and channel investments.

Margin targets and growth pools

HUL has set a medium-term Ebitda margin target of 22-24%. For the financial year 2026, the company posted an Ebitda margin of 23.6%. The plan aims to generate savings without relying solely on cost cuts, seeking increased operating use as revenue growth outpaces fixed cost expansion.

Priya Nair's strategy is built around four key growth pools: increasing consumption, premiumisation, bringing more consumers into categories, and entering new market spaces. HUL expects consumption and premiumisation to each account for 40% of its incremental turnover, with new spaces contributing the remaining 20%.

Category-specific plans

In the beauty and wellbeing segment, executive director Harman Dhillon said HUL sees substantial room for expansion. The company plans to invest in categories like bodywash, skin cleansing, and functional deodorants. Dhillon cited low usage of functional deodorants in India and changing lifestyles as a specific opportunity.

Investment in premium beauty is also a priority. More than 60% of HUL's media spending in this area is digital. The company's investment in premium brands is reportedly twice that of non-premium brands.

For its foods business, executive director Rajneet Kohli said HUL is repositioning established brands around changing consumption trends. The Horlicks brand, for instance, is being pushed toward lifestyle nutrition with a focus on superfoods and protein. The broader foods strategy includes premiumisation, functional nutrition, convenience, and ready-to-drink beverages.

The company, often seen as a proxy for Indian consumer demand, is betting on a shift in preferences within its existing portfolio to drive its revival.