Unilever neatly soaks up India’s two-tier recovery

MUMBAI, Jan 21 (Reuters Breakingviews) - Shareholders are scrutinising Unilever’s (ULVR.L) performance following its failed bid for GlaxoSmithKline’s consumer unit. The British company’s $71 billion Indian subsidiary Hindustan Unilever (HLL.NS), though, is rapidly gaining market share in India.

Well-heeled city folks are spending at least as much on the company’s ice cream and make-up as they were before the pandemic. The seller of Kwality Wall’s frozen treats and Lakme cosmetics grew domestic sales 11% to 130.9 billion rupees ($1.8 billion) in the December quarter, compared to the same period a year earlier. Publicly traded HUL, 62%-owned by Unilever, is growing twice as fast as the overall fast-moving consumer goods market as it takes share from smaller rivals less able to withstand soaring prices. Its EBITDA margin expanded, too, to 25.4%. That’s impressive given the recovery has stalled in poorer rural India, where industry volumes are dramatically shrinking.

In the three calendar years since Alan Jope became chief executive of the wider group, Hindustan Unilever has delivered a total annualised return of more than 11% against its parent’s 2%. Whatever concerns investors have, India is less of a drag. (By Una Galani)

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(The author is a Reuters Breakingviews columnist. The opinions expressed are their own.)

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