HUL targets 22-24% EBITDA margin, raises capex to 3% of turnover

Hindustan Unilever plans to increase capex from 2% to 3% of turnover while pursuing premiumisation, new-category investments, Unilever brand launches and bolt-on acquisitions. The company sees a 500-basis-point incremental margin opportunity through cost savings and portfolio shifts.

— Source publishedSun, 6 Sept, 2026, 10:50 IST·First seen Sun, 6 Sept, 2026, 10:56 IST·Source Business Standard · Companies

What happened

Hindustan Unilever · HUL targets a 22-24% medium-term EBITDA margin and will raise capex to 3% of turnover. It plans premiumisation, market development,

Key facts

  • 22-24% medium-term EBITDA margin target
  • 3% of turnover capex target, up from 2% over the past five years
  • FY26 revenue: Rs 63,763 crore
  • FY26 EBITDA margin: 23.6%, down about 70 basis points year-on-year
  • 21 brands with turnover above Rs 1,000 crore
  • 85 billion packs sold annually
  • 9 million outlets reached
  • 500 basis points incremental margin opportunity, equivalent to 5% of revenue
  • 20% of incremental turnover to be invested in new spaces
  • Underlying sales growth rose sequentially from 3% to 10% across four reporting periods
  • Households projected to rise from 293 million in 2018 to 386 million by 2030

Why this matters

HUL is explicitly positioning bolt-on acquisitions alongside Unilever brand launches and new-category investments, creating opportunities for targets that add premium brands, adjacency capabilities or scalable distribution.

What to watch

  • Quarterly EBITDA margin versus the 22-24% target range and disclosure of savings realised from cost and portfolio actions.
  • Capex-to-turnover progression toward 3%, asset-turnover trends and management commentary on project payback.
  • Organic volume growth versus price-led growth, especially in mass consumption categories and rural markets.
  • Premium portfolio growth, contribution from new categories and performance of newly introduced Unilever brands.
  • Advertising and promotion spend as a share of sales, indicating whether growth investment is outpacing cost savings.
  • Acquisition announcements, valuation multiples paid and integration milestones.
  • Commodity-cost movements and the extent of price increases or grammage reductions needed to protect margins.
  • Prioritise capex toward automation, manufacturing flexibility, premium-product capacity, direct-to-consumer/data infrastructure and high-growth category supply chains.
  • Accelerate launches of Unilever global brands and premium formats in beauty, wellbeing, foods and adjacent discretionary FMCG segments.
  • Pursue bolt-on acquisitions that add digital-native brands, science-led formulations, regional reach or premium category capabilities.
  • Use zero-based cost programmes, procurement scale and SKU rationalisation to create the targeted incremental margin pool.
  • Increase selective media and trade investment behind premiumisation while maintaining value packs to protect mass-market volumes.