HUL - Growth Engine Intact; Widening Moats Over Peers: Motilal Oswal
The company is building an extremely strong technological backbone.
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Motilal Oswal Report
Hindustan Unilever Ltd.’s Annual Investor Meet once again underlined the moats the company has and the remarkable nimbleness it continues to exhibit despite being much larger than peers. Highlights from the session:
The new sub categories, created over the last 10 years, now contribute ~20% to sales and are much more profitable than the base business.
HUL’s premium portfolio contributed 33% toward sales in FY22, up from 22% in FY12. Yet, there still lies significant opportunity for growth. In the last 12 months alone, the premium beauty business unit has grown two times the market rate.
India’s per capita fast moving consumer goods spend of $46 is extremely low compared to other emerging markets such as Indonesia, China, Thailand, and the Philippines, all of which have a per capita fmcg spend ranging between $100 and $440.
As highlighted earlier, the company is building an extremely strong technological backbone. Its business-to-business app, 'Shikhar”', now covers over half of its direct reach outlets. HUL’s digital demand capture is growing rapidly and stands at 25% of total demand.
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