Tag: fmcg

HUL: Sleeping Giant Ready to Break Out?

📈 Equity Research Update: Hindustan Unilever Ltd (HUL)
Over the past 2–3 years, HUL’s stock has been consolidating in a sideways trend, but recent management commentary and structural investments signal potential upside ahead.

🔍 Key Highlights:
✅ Strong focus on premiumization, innovation, and market-making
✅ Expected EBITDA improvement post 2–3 quarters
✅ Home Care segment sees robust volume growth; liquids expanding 5x faster
✅ Beauty & Wellbeing: Hair Care shines, Skin Care faces near-term softness
✅ Stock may witness a breakout if supported by volume and bullish price action

With sustained capex since 2021 and favorable tailwinds like stable raw material prices, HUL could be gearing up for a new growth phase—both fundamentally and technically.

📊 If you’re tracking FMCG giants or looking for stable compounders, this is one to watch!

HUL Equity Report

10 May, 2025
HUL’s Long-Term Strategy: Premiumization, Digital Push, and Steady Brand Strength

HUL, India’s largest FMCG company, continues to focus on premiumization, strategic acquisitions, and digital transformation to drive long-term growth. Despite near-term demand challenges, the company’s strong brand positioning, cost efficiency, and innovation-led strategy keep it resilient.

🔹 Revenue & Profit Trends 📈
🔹 Segment-Wise Performance 🏭
🔹 Premiumization & Market Strategy 💎
🔹 Growth Drivers & Challenges ⚡
🔹 Valuation Insights 📊

Hul Equity Research Report

15 April, 2025
FMCG Sector Set for Modest Growth in FY25: What’s Driving the Trend?

India’s Fast-Moving Consumer Goods (FMCG) sector is expected to register a modest revenue growth of 7–9% in FY25, according to a recent report by CRISIL Ratings. While this may seem like a slowdown compared to earlier years, it reflects both challenges and positive structural shifts within the sector.

Rural Revival Driving Volume Growth

One of the key contributors to this growth forecast is the expected recovery in rural demand. With inflation cooling off and a favorable monsoon anticipated, rural consumption is likely to improve. This revival is crucial because rural areas account for nearly 35–40% of FMCG sales in India.

Urban Market Trends: Premiumization on the Rise

In urban markets, demand for premium products in segments like personal care and home care continues to rise. This trend of premiumization is helping FMCG firms protect and even expand their margins, despite moderate overall revenue growth.

Segment-wise Expectations

Food and Beverages (F&B): Expected to grow by 8–9% driven by essential consumption and new product launches.

Home Care: Anticipated to grow in line with F&B, supported by hygiene awareness and lifestyle upgrades.

Personal Care: Projected to grow at a slower pace of 6–7%, though premium segments are expected to outperform.

Margins to Improve Slightly

Operating margins are likely to see an expansion of 50–75 basis points, reaching 20–21% in FY25. This improvement is attributed to better product mix (higher share of premium products), stabilized input costs, and efficiency initiatives by leading companies.

Key Challenges to Watch

Urban Mass Consumption: There’s still some sluggishness in urban mass-market demand, which could weigh down overall volumes.

Cost Pressures: Although input prices have moderated, volatility remains a concern, especially in categories dependent on global raw material prices.

Outlook for FY26

With a low base in FY25 and continued rural and premium product traction, FY26 could offer stronger growth momentum. The sector is expected to benefit from a combination of structural consumption trends and evolving customer preferences.

In summary, while FMCG companies may not post double-digit revenue growth in FY25, the fundamentals remain strong. Investors and industry watchers would do well to monitor rural demand patterns, raw material cost dynamics, and the pace of premium product adoption.

15 April, 2025
Rural Demand Recovery to Drive FMCG Growth to 6-8% in FY26: Crisil
According to Crisil ratings, the FMCG sector would mildly recover in FY26, and revenue growth is estimated to get 6-8%.

Breakdown of News:
- In FY24 or FY25, the FMCG sector revenue growth was slow; the main reason was that rural demand was weak. Rural people’s income growth was slow; that’s the reason their spending was compressed.
- Crisil believes that in FY26 demand would mildly improve, especially in rural areas, because their hope is monsoon will improve or government rural-focused policies will also impact.
- Last some quarters, the FMCG company’s revenue increased because of a price hike, not because of sales.
- Now the expectation is we see volume-based growth; in other words, people increase their spending power.
- If rural income increases, then consumption would also improve.
- If commodity prices are stable, then companies would maintain their margins easily.
- Companies should launch new products and adopt a premiumization strategy to boost their growth.
Overall, the FMCG sector may witness a gradual recovery, but full demand recovery will only happen when the rural market strengthens. Companies will now focus on sustainable growth and margin stability.
20 March, 2025
Best FMCG Stocks In India 2024
Hindustan Unilever Ltd

Market Cap ₹ 606,101 Cr.

Debt ₹ 1,043 Cr.

ROE 18.4 %

Sales growth 13.2 %

EPS ₹ 39.0

Industry PE 62.3

Stock P/E 66.0

ROCE 24.4 %

Promoter holding 61.9 %

Pledged percentage 0.00 %

PEG Ratio 4.22

Net profit ₹ 9,183 Cr.

Return on Equity:

10 Years: 45%

5 Years: 36%

3 Years: 28%

Last Year: 18%

Compounded Profit Growth:

10 Years: 13%

5 Years: 16%

3 Years: 13%

TTM: 11%

Compounded Sales Growth

10 Years: 8%

5 Years: 10%

3 Years: 10%

TTM: 13%

PROS:
- Company is almost debt free.
- Company has a good return on equity (ROE) track record: 3 Years ROE 28.4%
- Company has been maintaining a healthy dividend payout of 96.4%
CONS:
- Stock is trading at 12.4 times its book value
- The company has delivered a poor sales growth of 9.60% over the past five years.
- Promoter holding has decreased over last 3 years: -5.28%
Procter & Gamble Hygiene and Health Care Ltd

Market Cap ₹ 45,860 Cr.

Debt ₹ 5.10 Cr.

ROE 79.3 %

Sales growth 9.14 %

EPS ₹ 177

Industry PE 62.3

Stock P/E 79.6

ROCE 110 %

Promoter holding 70.6 %

Net profit ₹ 576 Cr.

PEG Ratio 14.3

Pledged percentage 0.00 %

Return on Equity:

10 Years: 44%

5 Years: 58%

3 Years: 62%

Last Year: 79%

Compounded Profit Growth:

10 Years: 12%

5 Years: 6%

3 Years: 11%

TTM: -12%

Compounded Sales Growth:

10 Years: 12%

5 Years: 11%

3 Years: 10%

TTM: 9%

PROS:
- Company is almost debt free.
- Company has a good return on equity (ROE) track record: 3 Years ROE 61.7%
- Company has been maintaining a healthy dividend payout of 109%
CONS:
- Stock is trading at 62.0 times its book value
- The company has delivered a poor sales growth of 11.0% over the past five years.
Colgate-Palmolive (India) Ltd

Market Cap ₹ 44,494 Cr.

Debt ₹ 83.0 Cr.

ROE 74.4 %

Sales growth 3.30 %

EPS ₹ 38.8

Industry PE 62.3

Stock P/E 42.0

ROCE 92.0 %

Promoter holding 51.0 %

Net profit ₹ 1,055 Cr.

PEG Ratio 3.15

Pledged percentage 0.00 %

Return on Equity:

10 Years: 65%

5 Years: 60%

3 Years: 67%

Last Year: 74%

Compounded Profit Growth:

10 Years: 9%

5 Years: 13%

3 Years: 13%

TTM: -1%

Compounded Sales Growth:

10 Years: 7%

5 Years: 5%

3 Years: 5%

TTM: 3%

PROS:
- Company is almost debt free.
- Company has a good return on equity (ROE) track record: 3 Years ROE 67.4%
- Company has been maintaining a healthy dividend payout of 98.0%
CONS:
1. Stock is trading at 25.8 times its book value
2. The company has delivered a poor sales growth of 5.07% over the past five years.
12 May, 2024
Adani Group Considers Exiting FMCG Joint Venture with Wilmar

In a significant development in the fast-paced world of business, the Adani Group is reportedly exploring the possibility of exiting its long-standing joint venture (JV) in the Fast-Moving Consumer Goods (FMCG) sector with Wilmar.

Why the Consideration to Exit?

Market Dynamics at Play

One of the primary factors contributing to Adani Group’s consideration to exit is the ever-evolving market dynamics. The FMCG industry is known for its sensitivity to market trends, and Adani may be responding strategically to these shifts.

Strategic Reevaluation

Companies often reassess their strategies to ensure alignment with their core competencies and long-term goals. Adani’s potential exit could be a result of a strategic shift, realigning the group’s focus and resources.

Quick Review:

Q1: Why is Adani Group considering an exit from the FMCG joint venture with Wilmar?

Adani Group’s potential exit is driven by a combination of factors, including market dynamics, strategic shifts, and a reevaluation of their business priorities. The FMCG industry is highly dynamic, and companies often reassess their strategies to stay aligned with evolving market trends.

Q2: How might the exit impact the Adani Group and Wilmar?

The exit could have profound effects on both Adani and Wilmar. It may influence their market standing, financial portfolios, and overall brand image. The specific impact will depend on the terms of the exit and the strategies each company adopts in response.

Q3: What challenges could Adani and Wilmar face post-exit?

Post-exit challenges could include navigating uncertainties in the market, redefining strategies to fill the void left by the exit, and ensuring a smooth transition. Maintaining brand integrity and sustaining customer trust are also critical considerations.

29 November, 2023