HUL Cuts Prices of Key FMCG Products, But Skincare Gets Costlier

Hindustan Unilever Ltd (HUL), India’s leading fast-moving consumer goods (FMCG) company, has lowered prices across its tea and homecare product categories. The price cut follows a decline in input costs, particularly raw materials, which allowed the company to pass on savings to consumers. In addition to softer raw material costs, intensified competition in the FMCG space has played a role in prompting this pricing adjustment.

In contrast, skincare and skin-cleansing products have seen a price increase. The company attributes this to higher costs of palm oil and its derivatives, key inputs in personal care formulations.

“Palm oil prices have witnessed a notable rise over the past 6 to 12 months,” said HUL CFO Ritesh Tiwari, justifying the upward revision in prices for these categories.

However, Tiwari noted that palm oil prices are now showing early signs of softening. If the trend continues, the company may revise prices downward in the coming quarters, in line with its “replenishment pricing” strategy, where cost savings are passed on to consumers.

During the April–June quarter, rural demand outpaced urban consumption, marking a positive shift in the market dynamics. “Rural is ahead of urban, but urban is catching up,” Tiwari stated, adding that the company sees signs of recovery in cities as well.

Improvements in urban demand have been supported by easing inflation, increased liquidity, and the tax relief measures announced in the recent Union Budget, which have helped boost consumer sentiment.

On the profitability front, HUL aims to maintain its operating margins at around 22% in the near term. The company plans to channel any gains from margin efficiency back into business expansion and brand-building initiatives. With input costs relatively stable, the company expects low single-digit price growth in the upcoming quarters.

HUL remains optimistic that the first half of the current fiscal year will outperform the second half of the previous one in terms of growth momentum. Addressing concerns over the newly announced 25% US import tariff, Tiwari said the impact on HUL would be minimal due to the company’s limited exposure to the US market. He added that the team is closely watching the broader implications of these tariffs and will recalibrate strategies if necessary.

Meanwhile, HUL’s ice cream business is set to be demerged, with a shareholder vote scheduled for August 12, as per the directions of the National Company Law Tribunal (NCLT).

Regarding its D2C skincare partner Minimalist, HUL shared that it is working collaboratively with the brand’s founders to shape future expansion plans and deepen market penetration.

For feedback and suggestions, write to us at [email protected]