Hindustan Unilever to boost growth with higher capex and focus on premiumization

Hindustan Unilever is looking to revive growth after a muted two-year period marked by cutting costs, sharpening portfolio and putting more money behind brands, distribution and new categories, managing director and chief executive Priya Nair said.

The country's largest consumer goods company also plans to increase capital expenditure to 3% of turnover from 2%, with more than 75% of that directed towards growth and savings, Nair said at the company's Capital Markets Day event.

HUL is targeting 500 basis points (5.0 percentage points) of "fuel for growth", through a combination of improved margins, operating efficiencies and savings, chief financial officer Niranjan Gupta said. It plans to redeploy those gains into the business, including product and packaging, media and sampling, pricing and pack architecture and channel investments.

The maker of Rin and Dove has set itself a medium-term Ebitda margin target of 22-24%. For FY26, the company posted an Ebitda margin of 23.6%.

The plan is to generate savings without relying on cost cuts alone, with HUL also seeking to increase operating leverage as revenue growth outpaces expansion in fixed costs.

Nair's strategy is built around four growth pools-increasing consumption, premiumisation, bringing more consumers into categories and entering new spaces. HUL expects consumption and premiumisation to each account for 40% of incremental turnover, with new spaces contributing 20%, Nair told investors. The company, often considered a proxy for consumer demand in India, is also betting on a shift in consumer preferences within its existing portfolio.

In beauty and wellbeing, HUL sees substantial room to expand categories such as bodywash, skin cleansing and functional deodorants, executive director Harman Dhillon said. The company plans to invest in developing functional deodorants, citing low usage in India and changing lifestyles as an opportunity.

HUL is also putting more resources behind premium beauty. More than 60% of its media spending is digital, while investment in premium brands is twice that of non-premium brands.

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