Hindustan Unilever (HUL), a prominent FMCG manufacturer, anticipates a gradual increase in overall demand without any imminent price hikes in the near future, according to CFO Ritesh Tiwari.
Additionally, he noted that the collective demand for fast-moving consumer goods (FMCG) from rural areas, which had been dwindling, has begun to show sequential growth and is poised to gain further momentum in the upcoming quarter.
Tiwari expressed optimism, stating, “We anticipate a gradual improvement in FMCG demand. Forecasts of above-normal monsoons and strengthening macroeconomic indicators bode well. We project a low single-digit decline in price growth for the first half of FY24,” during the earnings call.
Regarding prices, he mentioned that if commodity prices stay stable, they will “level off in the medium term and show positive growth at low single-digit rates by the conclusion of this fiscal year.”
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He anticipates a slight uptick in prices in the low single digits for the latter half of FY 2024-25.
In the past few quarters, HUL has successfully implemented price adjustments across all its portfolios.
During the March quarter, HUL experienced a reduction in prices for its Home Care and Personal Care products due to deflationary pressures on commodity prices.
“We have successfully adjusted our prices to reflect the benefits of commodity deflation across all sectors of HUL,” he stated, emphasizing, “Furthermore, there is no justification for any further sequential price increases.”
If commodity prices remain unchanged, their year-on-year impact will persist.
“Which means in short term, we will see a slight decline in low single digit numbers in our UVG,” he said.
Regarding rural demand, Tiwari noted that it has begun to increase alongside a gradual recovery in demand.
Tiwari expressed optimism, stating, “With the favorable monsoon forecast and improving macroeconomic conditions, I am hopeful that this recovery will persist and gain further momentum.”
Meanwhile, HUL also announced top-level changes in the company, with BP Biddappa joining its Management Committee as Executive Director of Human Resources for South Asia.
It said, “Subject to shareholder approval, Biddappa will soon join the Board as a Whole Time Director.”
Anuradha Razdan, Executive Director, Human Resources, HUL, and Chief HR Officer, South Asia, will be named Unilever’s Global Chief Reward & Organisation Development Officer.
It further stated that this adjustment will take effect from June 1, 2024.
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