HUL realigning water purifier portfolio for higher margins1 min read . Updated: 18 Jan 2019, 07:53 AM IST
Hindustan Unilever is phasing out the models in the low-cost gravity segment as part of the exercise
New Delhi: Hindustan Unilever, which entered the water purifier segment over a decade ago with a mass market offering, is driving its water purifier portfolio towards premiumization, top company officials told mediapersons on Thursday. The company is phasing out the models in the low-cost gravity segment as part of the exercise. The company had called for a press conference to discuss its December quarter earnings.
“In water purifiers, we are realigning our portfolio strategy towards premium devices while phasing out the gravity segment," a company release posted by the company on micro blogging site Twitter said. HUL markets its purifiers under the ‘Pureit brand. It offers air purifiers also under the same brand name.
A gravity water purifier is a cheaper solution to clean water of impurities and does not need electricity to operate. Most such purifiers come for less than ₹ 5,000 whereas premium offerings come for well over ₹ 10,000.
Water purifier is ₹ 3,500 crore market in India and has several competitors including Kent, LG, Tata Swach, Havells, Bajaj, Forbes Aquaguard and AO Smith.
Robust volume growth of 10% and selective price hikes propelled the December quarter net profit of Hindustan Unilever, the maker of Dove soaps and Sunsilk shampoos, 9% year-on-year to ₹ 1,444 crore on a standalone basis. The company said it expected demand to be stable in the near term.
Revenues from sale of products at the largest listed fast-moving consumer goods company in India came in at ₹ 9,357 crore, up 12.4%.
The company undertook price hikes to the tune of 2-3%, the company’s management told mediapersons during a press conference. Detergents and skin care categories had seen price hikes during the quarter. Domestic consumer growth was 13%, the company officials said.
Margins at the level of earnings before interest, tax, depreciation and amortization came in at 21.4%, an improvement of 170 basis points. In absolute terms, EBITDA was ₹ 2,046 crore, rising by a healthy 22%. The company said it was focused on volume growth and improving margins.