New Delhi, Jun 30 (PTI) Diversified FMCG major Hindustan Unilever Ltd expects input cost pressures to gradually ease as crude oil prices have retreated from recent highs, though it may take some time before costs return to normal levels, according to its Chairman Nitin Paranjpe. The quarter which has gone by had a significant impact in terms of commodity costs because crude prices, which impact a large part of HUL’s portfolio, rose significantly, crossing USD 100 per barrel at one point in time, Paranjpe said at the company’s annual general meeting (AGM).
“They have come back, and hopefully we should see things easing out a little going forward,” said Paranjpe while replying to shareholders.
However, he cautioned that the impact of higher input
costs would not disappear immediately.
“Commodity cost inflation this quarter has been significant and will take a while for it to come back to normalcy,” Paranjpe said.
He said HUL would continue to focus on cost efficiencies and productivity measures to protect profitability while minimising the burden on consumers.
“We find a way to protect our margins through first driving costs and cost efficiency even harder than we’ve done before. We look at every line of the P&L and extract value out of it so that our consumers don’t have to bear the same price increases that they otherwise would have to bear,” Paranjpe said.
The owner of brands such as Surf Excel, Lux, Pond’s and Dove said it remains focused on balancing growth, competitiveness and affordability amid a volatile commodity environment.
The cost of crude-derivative raw materials, packaging and logistics had gone up following a hike in crude oil prices, which was triggered by geopolitical conflicts in West Asia. To protect profit margins, FMCG players, including HUL, had raised prices or reduced pack sizes.
Replying to queries on demand trends, Paranjpe said both rural and urban markets are witnessing “relatively steady” growth, with rural India currently growing slightly faster than urban markets.
“Growth rates in rural India and urban India are relatively steady, with rural growing a little faster than urban,” he said.
Rejecting concerns that HUL’s focus on premiumisation could dilute its rural strategy, Paranjpe said rural markets would remain central to the company’s growth agenda as nearly 60 per cent of India’s population continues to live in rural areas.
“For a company like ours, which aspires to serve every Indian and where nine out of ten homes buy our products, rural will always be important,” he said, adding “6 out of 10 people continue to live in rural India”.
Paranjpe added that HUL’s broad portfolio, spanning multiple price points and accessible pack sizes, positions it well to cater to evolving rural consumer needs while continuing to drive market development and category expansion.
HUL is also building new capabilities, including Artificial Intelligence (AI), which will be the “cornerstone”. It will be increasingly embedded across the enterprise to strengthen consumer engagement, supply chain management and decision-making. PTI KRH SHM
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