HUL's Rohit Jawa Highlights Gradual Recovery In Rural Demand

Hindustan Unilever's Chief Executive Officer and Managing Director, Rohit Jawa provided an overview of the evolving FMCG landscape over recent years and highlighted key trends in the June quarter. He stated, “In the last 2 years, market volume recovery has been gradual and much lower than what we would have liked due to the impact of sustained high inflation, combined with erratic weather patterns. Consequently, rural growth which used to surpass urban had lagged behind urban over the last year.”

"In the last few months, we are seeing some green shoots in rural demand recovery. However, our 2-year CAGR rural growth still lags that of urban. We continue to closely monitor rural progress. There are a few critical factors that could impact the pace of recovery. India was hit by one of its worst heatwaves this year with many parts of country experiencing record-high temperatures. This was followed by rainfall deficit in the month of June. And while we are seeing recovery in July, we need to be watchful on how the entire monsoon season pans out and the overall impact on agriculture", Jawa said in a July 23 earnings call.

Jawa emphasised that India is experiencing rapid and significant transformation, evident in shifting consumer trends. With rising affluence, the new India is driven by aspirations for an improved quality of life. Consumers are becoming more discerning, seeking higher-order benefits and making holistic purchasing decisions. "This has also translated in premium segments performing better than mass, not just in FMCG but across industries," Jawa noted, highlighting the impact of the growing aspirational class.

He also emphasised the rapidly shifting landscape for information consumption and decision-making, with consumers increasingly relying on digital sources. The shift is supported by India's focus on building robust digital ecosystems.

"HUL has traversed this macroeconomic scenario with single-minded focus on our priorities for driving volume growth, strengthening competitiveness and maintaining healthy margins," Jawa shared in the call.

“In this backdrop, we have delivered a robust volume-led performance in this quarter. We generated revenue of INR 15,166 crores, led by 4 per cent underlying volume growth. Underlying sales growth at 2 per cent was impacted by negative UPG as we passed on the benefits of lower commodity prices to consumers.”

HUL's net profit increased by 3 per cent year-on-year, reaching Rs 2,538 crores.

"We continue to focus on operational excellence and build back our gross margins with a substantial part of those being reinvested behind brands and capabilities", Jawa stated.