More Stories

Informist, Thursday, Apr. 30, 2026

 

--HUL: Do not expect adverse impact in rural demand in H2 FY27 
--CONTEXT: HUL mgmt comments in Q4 post earnings analyst call 

 

By Avishek Rakshit & Ruchira Kagita

 

KOLKATA/MUMBAI – India's largest pure-play consumer goods company, Hindustan Unilever Ltd., is set to further rationalise costs to prevent steep price increases to protect the slowly reviving demand that had remained dented for nearly a year and a half. 

 

Closure of the Strait of Hormuz, which affected global shipping and movement of crude oil during US-Israel's military attack on Iran, made procurement costs of crude and its derivatives extremely volatile. This inflated costs for companies such as HUL, which is considering price hikes to pass on the rising input costs to consumers. 

 

However, the company, which is seemingly positive on rural demand, is concerned about falling demand if it increases prices. Hence, while the company may take judicious price increases in the current quarter to stave off input cost pressures, it will prioritise cost-cutting measures to maintain profitability, HUL's management said in a post-earnings conference call Thursday. 

 

Despite mounting cost pressures, HUL retained its guidance of 22.5-23.5% for earnings before interest, tax, depreciation, and amortisation for 2026-27 (Apr-Mar), signalling its confidence in cutting costs and increasing prices while maintaining the revival in consumer demand.

 

"We are well positioned because of the scale in which we operate to really navigate volatility," Chief Executive Officer and Managing Director Priya Nair said in the post-earnings analyst call. "But we will also double down behind costs which doesn't matter to consumers."

 

Executive Director of Finance and Chief Financial Officer Niranjan Gupta said HUL faced structural inflation during the outbreak of Russia's invasion of Ukraine, as commodity prices soared after the European Union stopped Russian gas purchases and global cost pressures were felt. But the current situation arising from the West Asian crisis, Gupta said, is more volatile. 

 

"It's a very short-termish situation as of now, which is not dependent on structural demand or supply issues. It's based on the geopolitical wall issue that's happening," he said. "And that is why we have to be measured in price increases that we take."

 

However, Gupta said HUL will hike prices further to maintain operating profit growth if cost control measures prove inadequate to control cost volatility. 
 
The company's decision comes in the wake of consumer demand bouncing back after a long hiatus. "Coming to mid-term outlook, from a demand standpoint, the demand environment remains stable with rural and urban (demand) both increasing," Nair said. 

 

Amid forecast of below-average monsoon this year, Nair said reservoir levels in the country are above normal and the minimum support prices of food grains have also increased, which led to a rise in farmers' income. Rural wages have also seen an upturn. Hence, Nair is positive on rural demand holding its recovery ground in the current financial year unless rainfall is below 85%.

 

"Given the reservoir (water levels), given the grain stocks and given the MSPs (minimum support prices), unless the rainfall is below 85%, we don't expect any impact on the rural demand of the H2 (Oct-Mar) as of now," Nair said. 

 

Thursday, shares of HUL closed around 3% lower at INR 2,250.90 on the National Stock Exchange. End

 

Edited by Tanima Banerjee

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd. by NSE Data & Analytics Ltd., a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt. Ltd.

 

Informist Media Tel +91 (22) 6985-4000  

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2026. All rights reserved.