FMCG major Hindustan Unilever hikes prices by 1-9%
Premium- This is the second round of price hikes initiated by the fast-moving consumer goods company in the month of February
NEW DELHI : India’s largest packaged consumer goods company Hindustan Unilever Ltd. has taken further price hikes in February across stock keeping units of brands such as Surf Excel Matic, Comfort fabric conditioner, Dove body wash, apart from Lifebuoy, Lux and Pears soaps.
On Monday, brokerage Edelweiss Securities said that as per its channel checks, prices have gone up across HUL’s home and personal care category in the range of 1—9%. This is the second round of price hikes initiated by the fast-moving consumer goods company in the month of February.
“As per our channel checks Hindustan Unilever has taken one more round of price hike in February. Our channel checks suggest latest price hikes have happened in many SKUs of Surf Excel Matic, Comfort Fabric conditioner, Dove body wash, Lifebuoy, Lux and Pears soaps, and Rin," Abneesh Roy, Executive Director, Institutional Equities, Edelweiss Securities said.
Two weeks ago, Hindustan Unilever had taken 3-10% price hike in soaps, detergents, and dish washing products. This was across its Surf Excel Easy Wash detergent, Surf Excel Quick Wash, Vim bar and liquid as well as Lux and Rexona soaps and Ponds Talcum powder.
Companies typically take price hikes in a staggered manner—instead of a one-time price increase across their entire portfolio.
HUL sells products across a range of categories including beauty and personal care, food and refreshments, and household care. In the December quarter, the company reported an underlying volume growth of 2%; sales were up 10.4% year-on-year. Price hikes, to offset input price pressure, drove revenue growth to double digits.
Persistent inflation across key commodities has been pushing companies to take multiple rounds of price increases. With price of crude oil moving up amid the Ukraine-Russia conflict escalated, analysts reckon inflationary pressures are here to stay.
Price increases will help the company overcome incremental inflation, said Roy.
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“Important to note that HUL takes price hikes in a staggered manner based on view on raw material prices, competition and a portfolio approach. With crude near $100, these price hikes will help overcome incremental inflation," analysts said.
Email queries sent to HUL remained unanswered.
In an earnings call after the company’s December quarter results—HUL’s top management said that with the significant inflation persisting in crude and its derivatives, the company continued with calibrated pricing actions in both fabric wash and household care.
A calibrated approach towards price increase in skin cleansing and hair care helped protect the company's business model, even as vegetable oils continue to inflate at record levels.
Roy said HUL enjoys high pricing power due to expansion in market share. The company reported its highest year-on-year share gains in more than a decade, it said in its December quarter earnings.
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