Hindustan Unilever Limited (HUL) is shifting its strategy to ‘Winning in New India’ from ‘Winning in Many Indias’ in a bid to raise consumption by increasing usage. The firm intends to chase premiumisation by offering more benefits, bring in more users, and enter new spaces by adding more categories, it said in its investor presentation for its Capital Market Day.

 

The focus remains to deliver volume-led profit growth, it said. Its earnings before interest, depreciation and amortisation (Ebitda) margin targets for the medium term is 22-24 per cent.

 

Shaping the portfolio structurally towards higher margins and wider range allows flexibility to invest for growth, the maker of Surf Excel said.

  

“Our value creation model is designed to deliver volume-led profit growth. Execution will be powered by three key enablers: Crafting desirable brands, accelerating a future-fit go-to-market and building AI as a distinctive competitive moat,” HUL said.

 

The company told analysts that it is investing disproportionately in its premium brands. It is investing two times more and spending over 60 per cent on its digital media spends. The firm is also investing in specialised channels.

 

HUL’s market share in the premium segment is growing at a higher pace, at 1.3 times of its mass segment products, it said citing NIQ (formerly known as Nielsen) moving annual total data from May. It said that India’s premiumisation is entering a new phase of acceleration.

 

HUL said that it is leading the market in under-penetrated segments, like hair masks, suncare, body wash, dishwasher liquid, laundry liquid and face cleansing.

 

“Laundry liquids is on the tipping point for scale,” it said, adding that it has a repeatable and proven market making model.

 

It also said that it will decisively enter select high growth new spaces and is also building a segmented frontline to win in New India.

 

HUL will chase growth in quick commerce with dedicated cross functional organisation and joint business planning. It will look to scale in specialised channels which include open format stores, chemists and cosmetics and expand its general trade distribution with a differentiated go-to-market strategy for rural reach and assortment selling.

 

The firm also said it will use artificial intelligence to increase research and development for faster innovation, effective marketing, integrated planning and operations across its supply chain, its go-to-market strategy and in finance.