The country’s largest consumer goods company Hindustan Unilever (HUL) believes the domestic FMCG market has come out of a difficult period of low growth and will continue to recover on favourable macro-economic fundamentals, including good rainfall, income tax cuts, lower repo rates and benign food inflation. HUL delivered 4% volume growth in the June quarter of FY26 on a consolidated basis, which is double the 2% it had reported in the last two years, with analysts and investors giving a thumbs up to the stock on Thursday.
Rohit Jawa
Outgoing CEO & MD Rohit Jawa said in a post-results briefing that the time was just right to dial up investment on advertising and innovation as the first half of FY26 was likely to be better than FY25 for the FMCG market. The accent on investment will mean that Ebitda margins will remain in the 22-23% bracket for HUL, as the company focuses on improving volume growth in the future. Jawa also noted the resilience and improvement in both urban and rural informal sectors, a crucial segment for the company. While the salaried urban class had faced stress in recent quarters, Jawa observed an uptick in urban consumption over the past few months despite trade and tariff-related uncertainties and technological disruption which had the potential to hurt sentiment in urban markets.
Priya Nair
Incoming CEO & MD Priya Nair, Jawa noted, would add value to the business amid a consumption uptick. She takes over on Friday as part of a leadership change that HUL announced earlier this month. She is likely to address a town hall on Friday, her first day in office, at the Mumbai headquarters of the company.
“Priya is perfectly cast for the role (of CEO) and is ready to take the business ahead while I focus on the next chapter of my life. I am both grateful and excited because I need to do something different now. Having said that, we are clear that we will invest for growth as the outlook for the first half of FY26 remains better than the second half of FY25,” he said. Jawa has spent 37 years at HUL and Unilever including roles like executive vice-president, North Asia and chairman, Unilever China.
“The FMCG sector has cycled out of the tough period it has had over the last few years and the moves that the government and central bank have made recently in terms of fiscal and monetary policy measures are big ones. These have the potential to move the needle significantly in terms of consumption,” he said. HUL will continue to focus on premiumisation and look at not just core categories, but also future core and market makers, he added. Roughly half of HUL’s business of over Rs 60,000 crore comes from core categories and the other half comes from categories of the future, basically, niche and emerging segments. For perspective, HUL derives 37% of its revenue from home care, 21% from beauty & wellbeing, 15% from personal care, 25% from foods.
HUL also expects commodity prices to be benign and price-led growth to be in low single-digits. A Kantar report this week noted that FMCG volume growth had slowed to 3.9% for the 12 months ended June 2025. While beverages were impacted due to unseasonal rains, home care remained strong, Kantar said. Jawa said the company was gaining share in e-commerce and modern trade and would continue looking at channels of the future such as quick commerce for growth. FMCG companies derive about 75-80% of their sales from general trade, about 12% from modern trade and about 8% from e-commerce. HUL mirrors this trend. While general trade has seen a slowdown in recent quarters, e-commerce, led by quick commerce and modern trade have enjoyed higher growth rates, experts said.
Jawa said that that 50% of HUL’s total media spending was now on digital, with half of that on social media. “We’re just going where the consumers are going,” he added.