Physical Address
Bengaluru, Karnataka
Table of Contents
When somebody says, ‘Any idiot could run this joint,’ that’s a plus as far as I’m concerned, because sooner or later any idiot probably is going to be running it.
— Peter Lynch & John Rothchild, One Up on Wall Street
Hindustan Unilever Limited (HUL) exemplifies resilience in the FMCG sector, maintaining market dominance despite leadership changes or economic fluctuations. As the Indian subsidiary of Unilever PLC, HUL has consistently leveraged its global brand portfolio, while also innovating and acquiring new products locally. Since its founding in 1931, the company has developed an unmatched distribution network, ensuring its presence in both urban and rural markets.
HUL’s success stems from three major strengths:
- Strategic acquisitions that enhance its brand portfolio.
- Strong financial discipline, balancing growth with shareholder returns.
- Innovative product expansion, tailored to India’s evolving consumer preferences.
The company benefits from Unilever’s global research and development pipeline, launching products developed by its parent while also creating India-specific innovations. Over time, HUL has acquired multiple brands, particularly in the personal care and nutrition segments, strengthening its foothold in high-growth categories.
Business Segments & Brand Portfolio
HUL operates across four key segments, covering home essentials, personal wellness, food & beverages, and beauty care products.
1. Home Care
This segment accounts for 37% of total revenue, offering household cleaning and fabric care products.
- Fabric Wash: Surf Excel, Rin, Comfort, Wheel, Sunlight.
- Household Care: Vim, Domex, Sun.
2. Beauty & Wellbeing
Representing 21% of revenue, this segment boasts high margins (32%), driven by premium brands.
- Hair Care: Clinic Plus, Sunsilk, Dove, TRESemmé, Indulekha, Love Beauty and Planet.
- Skin Care & Colour Cosmetics: Glow & Lovely, Vaseline, Pond’s, Lakmē, Simple, Elle 18, Novology, Minimalist.
- Health & Wellbeing: Liquid I.V., OZiva.
3. Personal Care
With a 15% revenue contribution, this segment covers daily hygiene products.
- Skin Cleansing: Lux, Lifebuoy, Pears, Dove, Hamam, Rexona, Liril, Moti, VWash.
- Oral Care: Closeup, Pepsodent.
- Deodorants: Rexona, Dove, Axe.
4. Foods
Despite high competition, this division contributes 25% of revenue.
- Beverages: 3 Roses, Taaza, Red Label, Lipton, Taj Mahal, Bru, Pukka.
- Lifestyle Nutrition: Horlicks, Boost.
- Packaged Foods: Kissan, Hellmann’s, Knorr.
- Ice Cream: Kwality Walls, Cornetto, Magnum.
HUL is in the process of demerging its ice cream business, transferring it to a newly formed subsidiary—Kwality Wall’s (India) Limited.
Financial Performance & Strategy
While HUL has remained financially stable, its revenue and profit growth have slowed in recent years:
| Year | Revenue Growth | PAT Growth |
|---|---|---|
| FY23-24 | 2.17% | 1.37% |
| FY24-25 | 1.98% | 3.73% |
Challenges Affecting Growth
- Economic slowdown impacting FMCG demand.
- High royalty payments to Unilever PLC (₹1,281 crore in FY24-25).
- Rising costs of services received from the parent company (₹849 crore for central services).
- Inflation affecting input prices, leading to cautious consumer spending.
A major aspect of HUL’s financial strategy is its advertising and promotional spending, which constitutes approximately 10% of its total revenue. In FY23-24, the company increased its advertising expenditure by 32%, likely driven by efforts to enhance brand visibility, expand market reach, and counter competitive pressures. However, in FY24-25, HUL reduced its advertising spend by 4.5%, bringing its total advertising and promotion expenses to 9.82% of revenue. This shift suggests a strategic recalibration, where the company may be focusing on digital-first marketing, influencer collaborations, and targeted campaigns rather than broad-spectrum advertising.
As consumer behavior evolves, FMCG firms like HUL continuously adjust their advertising strategies to balance cost efficiency with brand positioning.
Stock Performance
Despite its brand strength, HUL’s stock has underperformed compared to broader FMCG indices:
| Period | Stock Return |
| 5 Years | +10.05% |
| 3 Years | +5.56% |
| 1 Year | -6.77% |
Investors remain concerned about weak revenue expansion, though HUL’s strong dividend yield (2.29%) provides some cushion.
Hindustan Unilever Balance Sheet & Cash Reserves
HUL maintains a strong liquidity position, with zero debt, but rising lease liabilities (₹1,647 crore in Q4FY25).
| Metric | Value |
| Cash & Equivalents | ₹6,071 crore |
| Bank Balances | ₹1,483 crore |
| ROCE | 28% |
| ROE | 20.91% |
| P/E Ratio | 52.27 |
| P/B Ratio | 10.79 |
A major concern is HUL’s goodwill (₹17,466 crore), a residual effect of its GSK Consumer Healthcare acquisition, which inflates its balance sheet. This goodwill will eventually be reduced through impairment testing.
Leadership & Shareholding Structure
HUL’s leadership team includes:
- Chairman: Nitin Paranjpe
- CEO & MD: Rohit Jawa
- CFO: Ritesh Tiwari
- Executive Directors Across Divisions (Foods, Personal Care, Beauty & Wellbeing, Supply Chain, etc.).
Shareholding Breakdown (March 2025)
| Shareholder Category | Stake (%) |
| Unilever PLC | 61.90% |
| Mutual Funds | 6.42% |
| Insurance Companies | 8.21% |
| FPIs & FIIs | 10.62% |
| Retail Investors | 10.17% |
Competitive Landscape & Industry Outlook
HUL competes across different sectors within FMCG. Major players include:
- ITC – Strong competitor in Personal Care, Home Care, and Foods.
- Marico & Godrej Consumer Products – Compete in Personal Care & Home Care.
- Patanjali – Presents strong competition in PErsonal Care & Home Care segments
- Colgate-Palmolive – Dominates Oral Care.
- L’Oréal & Beiersdorf AG – Rivals in Beauty & Wellbeing.
- P&G & Jyothy Labs – Home & Personal Care.
- Honasa (Mamaearth) – Growing presence in Beauty & Wellbeing.
Industry Trends Affecting HUL
- Shift toward premium products: Rising disposable income fuels growth in Beauty & Wellbeing.
- Private-label competition: Supermarket brands challenge HUL’s dominance in Home & Personal Care.
- Digital transformation: Online sales & e-commerce drive direct-to-consumer strategies.
Conclusion
HUL remains an undisputed leader in India’s FMCG market, yet growth headwinds raise concerns about future expansion. The company’s strong brand portfolio, cost efficiency, and high-margin beauty products will likely drive performance in the long term. However, investors will be closely watching revenue revival strategies and potential goodwill impairments.
Also Read: Analysis of Jyothy Laboratories
Also Read: Analysis of Vishal Mega Mart
References
- One Up on Wall Street: How To Use What You Already Know To Make Money in the Market, Peter Lynch with John Rothchild
- Hindustan Unilever Annual Report FY24-25
- Hindustan Unilever Annual Report FY23-24
- Hindustan Unilever Annual Report FY22-23
- Hindustan Unilever Annual Report FY21-22
- Hindustan Unilever Annual Report FY20-21
- Hindustan Unilever Annual Report FY19-20
- Hindustan Unilever Annual Report FY18-19
- Hindustan Unilever page on Screener.in
- Hindustan Unilever page on MoneyControl
- Hindustan Unilever page on BSE website
- Unilever portal
- Hindustan Unilever portal
