Kamal Ghorui
MUMBAI: Hindustan Unilever (HUL) has hiked prices by 2-5%, signalling more increases could be in the offing going ahead as the company copes with a 8-10% cost inflation on the back of the West Asia war that sent oil prices soaring, weighing on raw material costs for a host of consumer goods ranging from detergents to lotions and dishwashing liquids.With supplies and its pace of production untouched by the war and demand remaining stable, the firm kept its outlook intact, betting on FY27 to be better than FY26, adding that higher reservoir levels and increase in MSPs (minimum support price) should support rural incomes, offsetting risks emanating from projections of a below normal monsoon and threat of El-nino conditions.
HUL rebounded from several quarters of subdued growth, recording a near 8% year-on-year rise in consolidated revenues in Q4 to Rs 16,351 crore with underlying volume growth at 6% touching a 15-quarter high. This is because demand looked up after a prolonged period of sluggishness partly helped by a benign domestic macro-environment during the quarter.Net profits increased to Rs 2,994 crore in Q4 from Rs 2,475 crore in the year-ago period, a growth of 21%, helped by proceeds from the divestment of stake in Wellbeing Nutrition. HUL’s underlying sales growth stood at 7%, its highest growth in 12 quarters.“We expect some recalibration between volume and price. We will take calibrated price increases, we will also focus on savings across the lines of the P&L and ensure that we do best in terms of leveraging both our financial stability as a company and operating scale and use that to ensure that we navigate the short-term while remaining very focused on the long-term growth opportunity that we have at HUL,” MD & CEO Priya Nair said in a post-earnings briefing on Thursday.Crude-linked inflation has weighed on HUL’s home care, personal care and beauty & wellbeing segments while the impact in the foods portfolio has been largely restricted to rise in packaging costs, said CFO Niranjan Gupta. The maker of Dove shampoos and Surf Excel has also scaled back trade discounts, promotions and media spends to save on their costs.HUL’s stock price, however, dropped following its earnings, ending 2.7% lower at Rs 2,251 on the BSE which the street attributed to price hikes. “Driving competitive volume-led growth will continue to remain our priority,” Nair said. The company’s strategy to step up omni-channel capabilities, make its brands more relevant to consumers through premiumisation has paid off, said Nair, helping the firm shore up its growth. “We will be doubling down on a few segments and categories, focusing on where the growth is,” said Nair.
