HUL’s Growth Reset: More Capex, Fewer And Bigger Bets

Hindustan Unilever Ltd (HUL) plans to raise productive capital expenditure to 3% of turnover from around 2%, as the FMCG major looks to accelerate growth through capacity expansion, portfolio reshaping and entry into newer consumer categories.

At its Capital Markets Day on Friday, HUL, in an investor presentation, said more than 75% of its capex over the past five years was directed towards growth and savings, and this is expected to rise to more than 85% under its new plan as capex increases to 3% of turnover from around 2%.

The higher capex is part of a wider capital-allocation approach that includes investing in the business, reshaping the portfolio and returning cash to shareholders.

HUL has also retained a medium-term EBITDA margin range of 22%-24%, giving it some flexibility to invest behind growth. This comes after FY26 turnover of ₹63,763 crore, underlying sales growth (UGR) of 5% and EBITDA of ₹15,054 crore.

HUL's Q1FY27 Results Show Scale

The strategy is already visible in HUL’s latest results as in Q1 FY27, the total income rose 9.8% year-on-year to ₹17,529 crore, compared with ₹15,958 crore a year earlier.

While underlying sales growth reached 10%, its highest in 13 quarters, underlying volume growth stood at 5%. EBITDA increased 8% to ₹3,947 crore, with the margin at 23%.

Reported net profit stood at ₹2,680 crore, down 2% year-on-year, partly because the year-ago period benefited from a one-off tax credit.

Segment-wise, home care led the growth with revenue rising to ₹6,554 crore from ₹5,777 crore a year earlier. Beauty & Wellbeing recorded revenue at ₹4,083 crore from ₹3,631 crore. Personal Care segment revenue rose to ₹2,624 crore, while Foods revenue increased to ₹3,480 crore.

HUL’s acquisition strategy therefore seems less about buying companies simply for scale and more about finding smaller, high-growth consumer businesses that can be scaled using its distribution, brands and operating capabilities.

HUL's Minimalist, OZiva Deals Show Growth

The company said it will enter new spaces through three routes: extensions of existing brands, brands from the wider Unilever portfolio and bolt-on acquisitions. It will assess opportunities based on three filters — right to win, size of the profit pool and sustainable growth.

Recent deals show the direction as HUL acquired 90.5% of skincare brand Minimalist in 2025 at an enterprise value of about ₹2,995 crore. At the time, Minimalist had an annual turnover of around ₹500 crore, making it a relatively small business compared with HUL but one operating in a fast-growing premium beauty segment.

HUL subsequently said Minimalist had delivered strong growth, while its latest Capital Markets Day presentation says the brand’s annual revenue run rate has doubled since acquisition and crossed ₹900 crore.

Another step of acquiring and divesting simultaneously provides another example. HUL acquired the remaining 49% of the health and wellness brand for ₹824 crore in FY26, taking full ownership, while simultaneously selling its 19.8% stake in Nutritionalab for ₹307 crore.

According to the company’s FY26 annual report, OZiva had grown fourfold in three years. The Nutritionalab exit, meanwhile, delivered more than four times HUL’s initial investment in 2023.

HUL's 'Fewer, Bigger Bets' Strategy

This portfolio rotation is important to HUL’s acquisition strategy. Alongside Minimalist and OZiva, it has demerged its ice-cream business, disposed of Pureit and exited Nutritionalab, indicating a willingness to free up capital from businesses that do not fit its sharpened priorities. The company describes this as its strategy of making “fewer, bigger bets”.

The spaces HUL is now eyeing are largely in emerging consumer pools: male grooming, masstige skincare, fragrances, vitamins and supplements, healthy snacking, protein, hydration, ready-to-drink products and functional deodorants, among others.

HUL calls these 'new, high-growth segments' and said it will selectively enter them where it has a right to win, profit pool and growth.

Beauty and wellbeing is already showing why HUL sees opportunity here as the segment generated ₹14,991 crore in FY26 revenue, with 6% underlying sales growth.

The company has also expanded its masstige and wellbeing portfolio fourfold. Its personal care segment generated revenue of ₹9,564 crore, with 4% USG.

Taken together, HUL’s approach suggests a shift from being primarily a consolidator of established FMCG categories to using acquisitions as a targeted entry point into faster-growing consumption pools, while divestments and higher capex provide the capital to scale those bets.