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Informist, Thursday, Apr. 24, 2025

 

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--HUL: Income-tax relief in Budget to augur well for urban demand 
--CONTEXT: HUL mgmt's comments at post-earnings press conference 
--HUL: See no new headwinds to macroeconomic growth 
--HUL: Consumers preferring lower-priced small packet variants of pdts 
--HUL: Agricultural crop output looking good for rural India 
--HUL: Rural recovery has been gradual, will keep improving

 

NEW DELHI – Hindustan Unilever Ltd. expects multiple levers such as no new macroeconomic headwinds, monetary policy and fiscal policy measures, deflation in the commodity market, and lower food inflation to increase overall net disposable income for Indian households. Following multiple quarters of subdued growth, these developments could lead to a recovery in urban demand, the company said Thursday in a post-earnings conference call with newswire agencies.

 

HUL has attributed its positive outlook for rural India to a good rabi sowing season and various initiatives announced in the Union Budget. The management said currently demand for jobs under the Mahatma Gandhi National Rural Employment Guarantee Act scheme is low. Lower demand for these jobs acts as a tailwind as it points towards better job opportunities available in rural India, thereby increasing disposable income. Recovery of demand in rural areas is gradual and will keep improving, HUL said.

 

About one-third of the company's overall revenues come from rural areas and the rest from urban areas. The company expects the first half of 2025-26 (Apr-Mar) to be better than the second half of FY25. 

 

The company's management noted that consumers opted for product variants priced at lower brackets rather than the expensive ones. Downtrading, as this phenomenon is known, was noticed in the nutrition business of HUL, coupled with lack of consumption growth. HUL plans to improve the taste of these beverages and also make them healthier. The company plans to lean into products that address nutritional deficiencies such as diabetes, protein deficiency, and weight management, among others, through its Horlicks Plus portfolio. Instances of downtrading have reduced since the December quarter and will go away soon, HUL said. 

 

HUL reported its March quarter earnings earlier on Thursday. The company's revenue for the reporting quarter was INR 152.1 billion, a modest 2% higher year-on-year, despite it being the strongest growth since the September quarter of FY23. The Surf Excel maker reported a net profit of INR 24.9 billion, along with a 2% volume growth. At 1350 IST, its shares traded 3.9% lower on the National Stock Exchange, at INR 2,329.  End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Anand JC

Edited by Akul Nishant Akhoury

 

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