Key Highlights:
- Tea and homecare prices cut due to lower raw material costs.
- Skincare prices increased because of high palm oil prices.
- Rural demand outpaces urban; both show signs of recovery.
Mumbai: Hindustan Unilever Ltd (HUL), India’s top FMCG company, has reduced prices of its tea and homecare products. This move comes as the cost of key raw materials has fallen. Competitive market pressure has also pushed the company to pass on these benefits to consumers.
Skincare Products See Price Hike
While prices fell in some categories, HUL increased prices of its skincare and skin-cleansing products. The reason is rising palm oil and its by-products, which are crucial for making these items.
“Palm oil prices have gone up in the last 6–12 months. That’s why we had to raise skincare prices,” said HUL CFO Ritesh Tiwari.
However, he added that palm oil prices are now showing signs of softening. If the trend continues, HUL may lower skincare prices in future, staying true to their “replenishment pricing” approach — passing cost benefits to customers when input prices drop.
Rural Growth Ahead of Urban
In the April–June quarter, HUL saw better demand from rural areas than cities. “Rural is ahead of urban, but urban is recovering too,” Tiwari said.
Urban markets are improving thanks to factors like lower inflation, better liquidity, and tax relief provided in the recent Budget. HUL hopes this recovery will continue in both urban and rural markets.
Margins and Price Outlook
HUL plans to keep its margins steady at around 22 percent in the coming quarters. Tiwari said the company would reinvest the money saved from improved margins back into business growth.
Looking ahead, the company expects low single-digit price growth if raw material prices remain stable. The first half of the current financial year is likely to perform better than the second half of last year.
US Tariff Impact Minimal
HUL said the new 25 percent US import tariff will not hurt its business much. “Our exports to the US are very small, so the direct impact is insignificant,” said Tiwari.
He added that the company will closely monitor the broader economic effects of these tariffs and respond if needed.
Ice Cream Demerger and Minimalist Update
HUL’s ice cream business is being demerged, and a shareholders’ meeting to approve this will take place on August 12, as directed by the National Company Law Tribunal.
On D2C skincare brand Minimalist, which HUL has partnered with, the company said it is working with the founders to plan future growth
(With PTI Inputs)
