HUL raises capex to 3% of turnover to reignite growth
Hindustan Unilever will lift capex from 2% to 3% of turnover, directing over 75% towards growth and savings. The FMCG major is reinvesting margin gains into brands, distribution, packaging and channels, with premium beauty, nutrition and ready-to-drink beverages among priority spaces.
What happened
Hindustan Unilever · HUL plans to revive India growth through higher capex, margin-led savings and reinvestment in brands, distribution, packaging and channels.
Key facts
- Capital expenditure to rise to 3% of turnover from 2%
- More than 75% of capex directed to growth and savings
- 500 basis points (5 percentage points) of fuel for growth targeted
- Medium-term EBITDA margin target: 22-24%
- FY26 EBITDA margin: 23.6%
- Consumption and premiumisation each targeted to contribute 40% of incremental turnover
- New spaces targeted to contribute 20% of incremental turnover
- More than 60% of media spending is digital
- Premium-brand investment is twice that of non-premium brands
Why this matters
HUL’s prioritisation of premium beauty, nutrition and ready-to-drink beverages highlights partnership or acquisition white spaces where capabilities, brands and channel access could accelerate category entry.
What to watch
- Quarterly volume growth and market-share movement versus FMCG peers.
- Capex-to-turnover progression and the proportion allocated to growth versus savings projects.
- EBITDA margin performance against the 22-24% medium-term framework.
- Growth rates and repeat purchase in premium beauty, nutrition and ready-to-drink beverage portfolios.
- Distribution reach, quick-commerce contribution and rural outlet expansion.
- Advertising and promotion spend intensity, gross-margin trends and competitive pricing actions.
- Accelerate direct and assisted distribution expansion in underpenetrated urban, rural and quick-commerce catchments.
- Increase launches, renovations and premium packs in beauty, wellbeing, nutrition and ready-to-drink beverages.
- Deploy productivity savings into higher advertising, digital commerce, packaging upgrades and channel-specific assortments.
- Use acquisitions, partnerships or minority investments to gain capabilities in high-growth wellness and beverage adjacencies.
- Defend core-category share through value packs and targeted pricing while premiumising upper-tier portfolios.