Uncertainty, volatility to continue in short term; expect volume-driven growth in coming quarters: HUL Chairman

Hindustan Unilever expects ''uncertainty and volatility'' in the market to continue in the short term but expects volume-driven growth in the coming quarters as commodity prices cool down, its Chairman Nitin Paranjpe said on Monday.

Speaking at the company's annual general meeting, he said it also expects a change in the nature of growth between urban markets and rural markets.

''In the short term, we will continue to see uncertainty and volatility as we shift from a period of extremely high inflation which required us to take high price increases to a position where pricing will taper off,'' Paranjpe said.

In some cases, HUL has even begun bringing prices down modestly, he added.

The company owns popular brands including Lux, Dove and Ponds.

''Over the next 6,12,18,24 months as we move forward, the balance between volume growth and price increases will undergo change, we will see less pricing and much more volume growth coming in.

''How it will transition and in what exact manner that time will tell but your company is extremely conscious and aware of this transition and is keeping an eye and making sure we remain competitive in the marketplace,'' he said.

According to Paranjpe, in the last decade alone, HUL has added nearly Rs 33,000 crore as incremental turnover and over Rs 9,500 crore as incremental EBITDA.

When asked about the competition, he said, ''we as a company, we may be leaders, but we remain very vigilant because, in the consumer goods industry, we cannot afford to take our eye off the ball.'' The market and consumer needs are changing and evolving very rapidly and HUL needs to be responsive and address those changes, he noted.

''We will continue to succeed as long as we remain relentlessly focused on the consumer and the consumer needs and make sure that we are fully focused in serving those well. As long as you do that, we will continue to continue to grow,'' he said.

He also said that ''I would say from a competition standpoint, it is intense. we keep an eye on it. And we will respond as required to address the consumer and the competitive challenges arising from this.'' While talking about innovations, Paranjpe said HUL had a turnover worth Rs 900 crore coming from new products in the last two years.

''We have many new brands - some of them are digital-only brands, some of them catering to new spaces in beauty. Brands such as Acnesquad, Find Your Happy Place, and Novology are all brands which have been launched in the recent past,'' he said.

While responding to a question about entry of new players and competition in the beauty and personal care space, Paranjpe said, ''the good news is that our market share is four times higher than the next largest competitor'' in the segment.

''So we are in a good place, we have a large business and we continue to innovate to remain the leader in this area,'' he said.

Terming the FMCG segment as a ''very attractive industry'' and that opportunities for growth are ''significant'', Paranjpe said India sees good prospects going forward and sees the likelihood of continuing to be amongst the fastest growing economies in the world.

The FMCG per capita consumption in this country is just around USD 50, which is well below countries like Indonesia and China, which is twice and thrice respectively.

''Now, while the market is a great opportunity, we as a company are very well placed to address that opportunity. We have been around in this country for long we understand the Indian consumer, and we have invested to build strong positions,'' he said, adding that 85 per cent of HUL's business comes from categories where it is a clear market leader.

HUL has 50 plus brands operating in 16 plus categories, he said, adding it was actively working to deepen its capabilities to ready for the evolving.

Meanwhile, outgoing CEO & MD Sanjeev Mehta thanked the management and directors during his leadership of the company.

Sharing an image of Retired Directors Meet' on Linkedin, he said their guidance has been instrumental in shaping his HUL journey.

''Over the years, as I led HUL in quite a challenging external environment, our retired directors have been my true North Star, my beacon of strength and stability and a reservoir of knowledge and experience that I have so often turned to,'' he said.