HUL Bets On Premium Products And Productivity, FMCG Demand Stays Resilient Despite Inflation

Mumbai: Hindustan Unilever Limited (HUL) is focusing its strategy on premium products, brand appeal and efficiency as the Indian fast-moving consumer goods market remains resilient despite rising inflation, according to Anand Rathi Research’s latest fortnightly report. HUL is prioritizing premiumization, precise consumer targeting, specialized distribution channels and digital-first marketing campaigns.

Key growth avenues include liquid detergents, high-end beauty items, body washes and whitening oral-care products. The company has raised its target savings under the Growth and Savings program to 3% of turnover from 2% previously. HUL has also adjusted its medium-term EBITDA margin outlook to 22-24%, up from the previous range of 22.5-23.5%, reflecting its aim to strike a balance between investment-driven expansion and cost control and productivity enhancements.

Data from Bizom and Wordpanel revealed that FMCG value growth accelerated to 6.8% sequentially in Q1FY27. Meanwhile, volume growth remained robust at around 4.5-5%. HUL noted that rural consumption remained resilient, while urban demand began to pick up. Companies are coping with rising raw material costs through price hikes, reduced product sizes and cost-cutting measures.

Leading paint manufacturers expressed optimism for FY27, citing strong volume and value growth in the first quarter, as well as the potential benefits of pricing adjustments, premium positioning and market share gains. ITC Infotech is considering a reverse listing in conjunction with Happiest Minds Technologies, which could boost the company's valuation visibility.

Despite a 15.61% decline in ITC's Q1 FY27 net profit to ₹4,508.79 crore, Anand Rathi anticipates a 10% revenue and 15% earnings CAGR for its 16-company coverage universe over FY26-FY28, with Marico, GCPL and Asian Paints identified as preferred picks with target prices of Rs 990, Rs 1,400 and Rs 3,180 respectively.