Hindustan Unilever has unveiled a new growth strategy, 'Winning in New India,' increasing capital spending to 3% of turnover and planning a major portfolio overhaul. The move aims to boost performance following recent pressure on the company's stock price and consumer demand.
Hindustan Unilever (HUL) has announced a significant shift in its business strategy, dubbed "Winning in New India," as the consumer goods major looks to reverse a period of stagnation. The strategy, revealed on September 4, 2026, involves increasing capital spending to 3% of its annual turnover, up from the previous 2%. This additional money is intended to fuel investments in brand visibility, digital-led marketing, and entry into new product categories.
The company is also focusing on a major portfolio overhaul. This includes the planned demerger of its ice cream business and the divestment of its water purification brand, Pureit. By shedding these non-core assets, HUL aims to focus resources on higher-growth areas like male grooming, premium skincare, and functional nutrition. The management aims to generate savings equal to 5 percentage points of turnover through operational efficiency, which will be redirected toward supporting these growth areas.
To provide flexibility for these investments, the company has broadened its medium-term EBITDA margin guidance to a range of 22% to 24%. This flexibility is intended to allow the business to reinvest in its products without being constrained by rigid profit targets. The strategy relies on four key pillars: increasing overall consumption, shifting toward higher-value products, expanding into under-penetrated categories, and entering entirely new market segments.
This strategic refresh comes at a time when HUL’s stock has faced significant downward pressure, recently hitting 52-week lows. Investors have been concerned about slowing volume growth and the company's ability to maintain its market position in an evolving retail environment.
While the company looks to modernize, there are several risks that investors may watch. Rising costs of raw materials, particularly palm oil and crude oil derivatives, remain a potential challenge that could put pressure on profit margins. Additionally, the company faces the challenge of managing high customer acquisition costs as it scales presence in quick-commerce channels. There is also the risk that rural demand recovery may not meet expectations, which would impact volume growth. Finally, the successful execution of the portfolio overhaul—specifically the transition of legacy brands and the integration of new product categories—will be a key factor for the company's future performance. The market will likely monitor the upcoming management interactions, including institutional meetings scheduled for next week, for further clarity on the implementation timeline.