HUL Q2: Priya Nair flags 7% volume growth, rural recovery

'Well placed for consumption growth': HUL bets on rural recovery, premiumisation in strong Q2 performance

Mumbai, October 28

Addressing the media in Mumbai on Wednesday during the FMCG major's Q2 financial earnings meet, Chief Executive Officer & Managing Director Priya Nair and Chief Financial Officer Niranjan Gupta laid out a high-energy roadmap for market expansion, capital allocation, and volume-led profitability.

Opening the briefing, Priya Nair expressed confidence in India's macroeconomic backdrop and long-term consumption drivers.

"If you look at the GDP of the country, it was 7.8% in the last quarter, and forecasts stand around 7%+. With our portfolio of brands, we are very well placed to capture consumption-led growth," Nair said, signaling strong prospects for double-digit trajectory over time. High-frequency indicators, including auto sales and GST collections, continue to reflect underlying economic strength.

On demand dynamics, HUL highlighted a visible step-up in rural markets quarter-after-quarter, even as urban growth remained steady. Nair noted that despite below-normal monsoons, agricultural tailwinds are supported by structural factors.

"Agriculture is under 15% of GDP today. More importantly, MSP increases of 5-6% and higher MGNREGA outlays are improving overall rural wages," she added.

Addressing queries on rural demand and profitability, the management reiterated that mass consumption remains resilient while premium categories scale rapidly.

​Niranjan Gupta explained that cyclical cost shifts do not alter structural expansion: "When there is an inflationary environment, you have to focus on how your top line is growing and how your bottom line is growing."

Gupta assured that operating margins remain strictly within the guided 20-24% band. While input inflation poses short-term cyclical pressure, HUL's portfolio is shifting towards higher-margin categories like liquid detergents and premium skincare, balancing volume growth with absolute profit expansion.

On marketing efficiency, HUL strategically optimised spending without sacrificing competitiveness. Gupta revealed that Home Care advertising was calibrated by ₹200 crore to limit price hikes for consumers, while spends in personal care and foods segment rose by ₹100 crore. HUL's Share of Voice to Share of Market index improved to 1.1.

Highlighting capital allocation, Gupta emphasised robust balance sheet management following a 30% YoY surge in H1 operating cash flows. CapEx has been stepped up to 2-3% of turnover to fund liquid capacity expansion alongside dividend payouts and inorganic investments.

In foods & refreshments segment, lifestyle nutrition logged six consecutive quarters of strong growth, and Kisan sauces saw strong momentum following a relaunch, while mass tea faced cost-related demand suppression.

In oral care, Closeup delivered strong quarter-on-quarter gains across freshness and whitening segments.

Nair outlined HUL's strategy to democratize protein via Horlicks. "Protein penetration in India is in single digits. The job of Horlicks is to democratize protein for everyone at 40-50% lower prices than niche products," Nair stated.

— ANI