At HUL, cost savings take centre stage

HUL is keeping a close watch on profitability as pressure to improve sales volume growth increases

For two successive quarters, the country’s largest consumer goods company, Hindustan Unilever Ltd (HUL), reported strong operating profit margin. While the March quarter saw operating margin improve by 100 basis points year-on-year, this metric jumped 170-180 basis points year-on-year in the June quarter.

Analysts say HUL is keeping a close watch on profitability even as pressure to improve sales volume growth increases. Operating margin, a measure of profitability derived by dividing operating profit by revenue, is on HUL’s radar as part of parent Unilever’s global strategy.

In April, the world’s second-largest consumer goods company, Unilever, said it would combine two