India's largest consumer goods company raised prices by around 7.5% across its portfolio in the September quarter to offset higher input costs. The increases have not derailed demand, with underlying volume growth improving sequentially and reaching its highest level in 14 quarters, pointing to consumers' continued purchases of everyday essentials despite price pressures.
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"We have taken pricing to cover all the input costs that we have seen. Input costs remain elevated," Nair said at a post-earnings press briefing.
HUL will balance further pricing actions with savings from procurement, supply-chain efficiencies and operational improvements, while seeking to protect volumes and grow revenue and absolute profit. The company has not specified the extent of any additional price increases in the December quarter, with Nair saying decisions would depend on how input costs evolve.
"...A large part of the brunt of the inflation was faced in the quarter gone by. And therefore, we will continue to have to calibrate price, savings, procurement, supply chain efficiencies. So, that is really how we will manage," she said, adding, "Our focus will be to deliver volume, continue to shore up volume to deliver revenue and total absolute profit."
Chief financial officer Niranjan Gupta said HUL prefers a measured approach to price increases rather than imposing a sharp shock on consumers. The company first seeks to recover the absolute increase in costs, while the extent of margin recovery in percentage terms depends on subsequent movements in input prices.
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Nair said demand remained positive across both urban and rural markets, with rural demand improving sequentially. She pointed to electricity demand, GST collections and passenger vehicle sales as indicators of economic resilience.
A below-normal monsoon and localised drought conditions could, however, create challenges in some rural pockets. Nair said higher minimum support prices (MSP) and increased allocations under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) could help cushion the impact on rural wages.
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