HUL Focuses On Premium Products Amid Resilient FMCG Demand

Hindustan Unilever Limited (HUL) is focusing on premium products and productivity as the fast-moving consumer goods (FMCG) market in India continues to show resilience despite inflationary pressure.

According to Anand Rathi Research, HUL is placing greater emphasis on premiumisation, closer consumer segmentation, specialised distribution, and digital-first marketing. The company has identified liquid detergents, premium beauty products, body washes, and whitening oral-care products as key growth opportunities.

HUL has increased its targeted savings under its Growth and Savings programme to 3 percent of turnover from 2 percent earlier. The company has also revised its medium-term EBITDA margin guidance to 22–24 percent, compared with its previous range of 22.5–23.5 percent. This wider range reflects HUL's focus on balancing investment-led growth with cost discipline and productivity improvements.

Data from Bizom and Wordpanel showed that FMCG value growth improved sequentially to 6.8 percent during Q1FY27. Volume growth remained healthy at around 4.5–5 percent. Rural consumption continued to remain resilient, while urban demand showed signs of catching up.

Price increases, reductions in product grammage, and cost-saving measures are helping companies manage rising raw-material expenses. The paint companies, for instance, maintained a positive outlook for FY27 following healthy volume and value growth during the first quarter.

Anand Rathi expects its 16-company coverage universe to record around 10 percent revenue CAGR and 15 percent earnings CAGR over FY26–FY28. The research firm's preferred picks are Marico, GCPL, and Asian Paints, with target prices of Rs 990, Rs 1,400, and Rs 3,180, respectively.

The focus on premium products and productivity is expected to drive growth for HUL and other FMCG companies in the coming years. Despite inflationary pressure, the FMCG market in India is expected to remain resilient, driven by rural consumption and urban demand.

The proposed merger of ITC Infotech with Happiest Minds Technologies could facilitate the reverse listing of ITC Infotech and improve visibility around its valuation. Although the immediate sum-of-the-parts valuation benefit is modest, the transaction highlights ITC's continued focus on unlocking portfolio value.

In terms of market outlook, Anand Rathi Research expects the FMCG sector to continue growing, driven by premiumisation, digital-first marketing, and cost discipline. The research firm's preferred picks are expected to outperform the market, driven by their strong brand portfolios and focus on productivity.

Overall, the FMCG market in India is expected to remain resilient, driven by rural consumption, urban demand, and the focus on premium products and productivity. Despite inflationary pressure, companies like HUL are expected to drive growth, driven by their strong brand portfolios and focus on cost discipline.

The growth of the FMCG sector is expected to have a positive impact on the Indian economy, driven by the creation of jobs, increase in revenue, and growth of the manufacturing sector. As the sector continues to grow, it is expected to play an increasingly important role in driving economic growth and development in India.

In conclusion, the focus on premium products and productivity is expected to drive growth for HUL and other FMCG companies in the coming years. Despite inflationary pressure, the FMCG market in India is expected to remain resilient, driven by rural consumption and urban demand. The proposed merger of ITC Infotech with Happiest Minds Technologies is expected to improve visibility around its valuation, and the research firm's preferred picks are expected to outperform the market.

The significance of this development for Mumbai and India is that it highlights the resilience of the FMCG market in the face of inflationary pressure. The focus on premium products and productivity is expected to drive growth, create jobs, and increase revenue, which will have a positive impact on the Indian economy. As the sector continues to grow, it is expected to play an increasingly important role in driving economic growth and development in India.