Sanjiv Mehta, Chairman and Managing Director of Hindustan Unilever Limited (HUL), on Tuesday said the effects of the COVID-19 pandemic are only a pause in India’s consumption and growth story and the country is poised for unprecedented growth.
Addressing shareholders at the company's 88th Annual General Meeting, Mehta said the pandemic has pushed businesses to break new ground and reimagine the future that is equitable, sustainable, and purposeful. He said achieving this will require concerted efforts from governments, businesses, and individuals.
Speaking on the company’s performance in the past decade, Mehta said the company added nearly Rs 26,000 crore and more than doubled turnover to Rs 45,000 crore, while market capitalisation increased 9 times to more than Rs 570,000 crore in the past decade.
Addressing shareholders, Mehta said in the coming decade, the company will rely on three drivers for growth that would include Unilever Compass, building an Intelligent Enterprise and building Leaders of the Future.
Unilever Compass is the company’s sustainable business strategy, which chalks out the company’s strategic choices and actions.
Mehta said the company will focus on expanding high-growth segments.
He added HUL embraced diversity and promoted inclusion across its beauty & personal care portfolio by removing the word ‘normal’ from advertising and packaging of the portfolio.
He also said the company will replace fossil fuels used in laundry cleaning products with renewable and recycled carbon and that it aims to make food healthier, safer, and with less wastage.
Going forward, Mehta added the company is building an ‘Intelligent Enterprise,’ and HUL of the future will be a web of intelligent ecosystems with data, technology, and analytics at the core.
“Our core business will become smarter and efficient by becoming data-led and machine-augmented while we create customised platforms and ecosystems for differentiated consumer and customer value. This will build a value chain that delivers for scale and efficiency of the large while building nimbleness of smalls,” he added.
Mehta also answered several questions posed by shareholders about the company’s performance and plans, going ahead.
Speaking about inflation, Mehta said they are seeing an unprecedented increase in the price of palm oil and crude oil-based derivates and continue to look at pricing with a close eye on inflation.
He added HUL will continue to take price hikes in a calibrated and judicious manner.
Answering a shareholder query on rural growth, Mehta said while rural growth has been outpacing urban growth, in the light of the second wave, it will take few more weeks to assess impact on rural areas. However, he expects rural growth to be resilient.
In terms of businesses and categories impacted by the pandemic, Mehta said while changing the brand name of its product Glow & Lovely from Fair & Lovely has been taken well in the market, sales of the product have been impacted during the pandemic, since it’s a discretionary product.
Mehta also added that the profitability of Lakme Lever too was impacted due to the pandemic and lack of mobility.
According to him, the company is seeing an increased demand for health and hygiene categories. In fact, Mehta also mentioned that HUL launched several new products and formats such as fabric sanitiser, fruit and vegetable wash, anti-bacterial dishwash amongst others in the past one year, to meet the growing need for health, hygiene and sanitation.
He stated HUL is excited about inorganic growth opportunities, especially if they make sense and sync with the company’s long-term strategy.