Latest news with #HUL
Mint
7 hours ago
- Business
- Mint
DMart eyes higher margins via private labels as quick commerce grows
Bengaluru:Avenue Supermarts Ltd, which operates the DMart retail chain, is expanding its private label portfolio beyond food staples and packaged groceries into home and personal care (HPC) categories, as it looks to improve margins amid rising quick commerce competition and sluggish consumer spending. This move mirrors a broader trend in value retail, where private labels are increasingly being used to drive affordability and protect margins. Private labels are in-house brands often sold at lower prices and are owned and sold exclusively by a retailer. 'Fast moving consumer goods (FMCG) companies are expandingtheir product lines and trying new things, like HUL is cutting back on palm oil, and Nestle teaming up with a drug company for a new recipe," said an equity research analyst working in a Mumbai-based brokerage firm who did not want to be named. Dmart's rival Tata Trent Star Bazaar has built a successful private label category which has more than doubled its revenue from ₹1,798 crore in FY23 to ₹2,699 crore in FY25. In categories where private labels are offered, they now contribute over 70% of sales, up from around 60% two years ago. Vishal Mega Mart, which has a strong presence in tier-II and tier-III cities, reported revenue of ₹10,716.3 crore in FY25. While the company does not break out private label contribution in its financials, industry estimates suggest that 65-70% of its sales come from in-house brands across apparel, footwear, and general merchandise. DMart has started expanding its private labels in categories such as detergents, beverages, soaps, and biscuits under various brand names such as 'Star Bright", 'Sparkle", and 'Bisky Bites", which compete with similar product lines from some of the country's largest fast-moving consumer goods (FMCG) players, including Hindustan Unilever (HUL), Nestlé, and ITC. Mails sent to DMart did not elicit a response until press time. 'DMart is attempting to increase its gross margins by adding private labels in more categories (HPC, foods); this may only partly offset QC-induced footfall and cost pressure," according to a Kotak Institutional Equities Report written by Garima Mishra and Ishaini Swain on 23 June. Private labels According to the report, these private labels now occupy 20-30% of shelf space in select product categories at DMart outlets. The retailer previously restricted private labels to its staple product category under the 'Premia" brand, which was started in 2002. According to the report, these private labels are priced about 30-70% lower than some of the branded FMCG products. This underscores the retailer's vision to sell everyday products at 'everyday low prices" to Indian consumers. For example, its private label detergent, Star Bright, costs ₹72 per kg, while P&G's Tide costs ₹125 per kg. Similarly, the retailer's mango juice under the Go Fruit brand sells at ₹34 compared to Parle Agro's Frooti. Founded by billionaire Radhakishan Damani in 2000, DMart opened its first store in Powai, Mumbai, in 2002. Today, it is India's largest retail chain, with a market capitalisation of ₹2.8 trillion. The company went public in 2017 and has built its success by offering consistently low prices. DMart pays wholesalers upfront, often ahead of industry payment cycles and secures deeper discounts, which it passes on to consumers. The company is currently navigating a phase of transition, facing twin challenges: a change in leadership and intensifying competition from quick commerce players. Longtime chief executive officer Neville Noronha, who has been instrumental in building DMart into India's most valuable retail chain, is expected to step down by 2026. He will be succeeded by Anshul Asawa. 'It seems like Asawa might have a significant challenge ahead given the high benchmark that Noronha has set," said the analyst based in Mumbai. The retailer's aggressive push into private labels also coincides with the rapid rise of quick commerce players such as Zomato's Blinkit, Swiggy's Instamart, and Zepto, which have been making inroads in several cities, especially in tier-II and tier-III cities, where DMart has limited presence. According to the Kotak report, there are over 100 cities where one or more quick commerce platforms have a presence, but DMart does not. 'Quick commerce is outpacing DMart Ready, which operates more like traditional e-commerce with one- to two-day delivery. In contrast, quick commerce players deliver within minutes," said the analyst. Increasing coverage DMart currently has stores across 152 cities, while Blinkit operates in 194 cities, followed by Instamart and Zepto that are present across 116 and 73 cities.'In urban and metro markets, quick commerce has high penetration, but DMart is present even in places where Q-commerce hasn't reached, so I think it will be able to keep up with rising competition," said Pratik Prajapati, equity research analyst at Ambit. Despite its value positioning, DMart's profitability has come under strain in recent years. According to the company's FY25 financials, the company's Ebitda margin, a profitability metric that indicates the company's operating performance, declined from 8.5% in FY23 to 7.6%, even as gross margins remained steady at 14.8%. 'The main reason for this drop is due to rising employee costs," said the analyst. The employee cost now accounts for 6% of revenues, up from 5.4% two years ago. 'The private labels tend to be cheaper, and if the consumers are satisfied with the quality of the products, the expansion will deepen further," said the analyst. 'In the long term, this can impact the margins of some of the branded FMCG goods." The private label push is also supported by DMart's ongoing store expansion. DMart added 50 stores in FY25 and plans to open about 75 new stores over the next three years, according to the Kotak report on 23 June 2025. States like Uttar Pradesh and Odisha are expected to be key focus areas. The company recently entered Agra, marking its first expansion into the state beyond Ghaziabad. The company clocked a revenue of ₹59,358 in FY25, a 16.9% increase over the previous fiscal year. The company's net profit jumped 6.7% from ₹2,536 crore in FY24 to ₹2,707 crore in FY25. 'Private labels not only improve margins but also give customers more choice within a price band," said Prajapati. 'If customers are satisfied with the quality, they are likely to stick with the brand over time." 'As they gain acceptance, we're already seeing revenue pressure on traditional FMCG brands. Brand cannibalisation will likely continue as competition intensifies", said the analyst who did not want to be named.
Economic Times
a day ago
- Business
- Economic Times
HUL Share Price Live Updates: HUL Market Activity Update
27 Jun 2025 | 08:47:23 AM IST Discover the HUL Stock Liveblog, your go-to destination for real-time updates and comprehensive analysis of a top-performing stock. Keep track of HUL's latest details, including: Last traded price 2280.8, Market capitalization: 535894.78, Volume: 1874722, Price-to-earnings ratio 50.32, Earnings per share 45.32. Our liveblog offers a holistic view of HUL by examining both fundamental and technical indicators. Stay ahead of market trends with breakingnews that can impact HUL's performance. Our market analysis and expert opinions provide valuable insights to guide your investment decisions. Join us on the HUL Stock Liveblog and stay informed in this dynamic market landscape. The data points are updated as on 08:47:22 AM IST, 27 Jun 2025 Show more
Time of India
3 days ago
- Business
- Time of India
Unilever's demerged ice cream entity to acquire 61.9 pc stake in Kwality Wall's
Global FMCG major Unilever on Wednesday said Magnum HoldCo will acquire 61.9 per cent of Kwality Wall's (India) Ltd. Magnum HoldCo is the holding firm within the new firm formed by the demerger of the ice cream business of Unilever. On March 19, 2024, Unilever PLC announced to separate its global ice cream business into a stand-alone business. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Free IELTS Cheat Sheet IELTS Prep Pro IELTS Prep Pro Learn More Undo The separation of the global ice cream business is expected to be completed in the fourth quarter of 2025 and the new company is known as 'The Magnum Ice Cream Company ', Unilever said in a statement. In India, the company's subsidiary Hindustan Unilever Ltd (HUL) on January 22 this year announced to demerge its ice cream business into an independent entity -- Kwality Wall's (India) Ltd (KWIL). On completion of the demerger, HUL shareholders get one share of KWIL for each HUL share. Live Events As a result, the Unilever Group is expected to hold 61.9 per cent of the issued and paid-up share capital of KWIL, following the completion of the India demerger, the company said. "The Magnum Ice Cream Company HoldCo 1 Netherlands BV (Magnum HoldCo), The Magnum Ice Cream Company BV and entities within the Unilever Group have today entered into a share purchase agreement (SPA) pursuant to which Magnum HoldCo has agreed to acquire all of the KWIL shares to be issued to the Unilever Group as a result of the India demerger i.e., 61.9 per cent of the issued and paid-up share capital of KWIL," the statement said. The completion of the acquisition of these shares is subject to the fulfilment of certain conditions in the SPA, including the successful demerger of KWIL from HUL, and listing of KWIL shares, and receipt of requisite statutory and other approvals, it added. Also, it will be subject to Magnum HoldCo making an open offer to the public shareholders of KWIL for additional shares of KWIL in accordance with the Securities and Exchange Board of India takeover regulations, the statement said.
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Business Standard
3 days ago
- Business
- Business Standard
Magnum to acquire 61.9% of Kwality Wall's India from Unilever Group
The Magnum Ice Cream Company HoldCo 1 Netherlands B.V. has agreed to acquire 61.9 per cent of Kwality Wall's (India) (KWI) from the Unilever Group, Hindustan Unilever (HUL) said in a stock exchange filing. 'Magnum HoldCo has agreed to acquire all of the KWIL shares to be issued to the Unilever Group shareholders pursuant to the demerger, comprising 61.9 per cent of the issued and paid-up share capital of KWI,' the filing said. Completion of the acquisition is subject to the fulfilment of conditions outlined in the share purchase agreement. These include the successful demerger of KWI from Hindustan Unilever, the listing of KWI shares, and receipt of requisite statutory and other approvals. The filing also stated that Magnum HoldCo will be required to make an open offer to public shareholders of KWI for additional shares, in accordance with the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011. 'Unilever PLC has been informed by The Magnum Ice Cream Company that, upon acquiring the India IPRs, The Magnum Ice Cream Company will ensure continued access to the India IPRs by HUL, and upon effectiveness of the demerger, by KWI, on substantially the same commercial terms as the existing licence arrangements, and until a date no earlier than 1 February 2028, subject to receipt of requisite regulatory approvals,' the filing added. In January, the board of directors of Hindustan Unilever approved the demerger of its ice cream business, KWI, into an independent listed entity. At the time, the company had also stated that under the scheme, one equity share of KWI would be allotted for every one equity share held in Hindustan Unilever. Upon demerger and listing, the entire shareholding of KWI will be held directly by HUL shareholders.
Business Upturn
3 days ago
- Business
- Business Upturn
Hindustan Unilever shares rise as Nuvama maintains ‘Buy' rating, sees 34% upside on improving margins and TAM expansion
By Aditya Bhagchandani Published on June 25, 2025, 10:38 IST Shares of Hindustan Unilever Limited (HUL) climbed nearly 1% to ₹2,284.20 on Wednesday, June 25, following a positive note from Nuvama Institutional Equities. The brokerage has maintained its 'Buy' rating on the stock and set a target price of ₹3,055 per share, implying a potential upside of 34% from current levels. Nuvama highlighted that HUL's sharpened focus on Direct-to-Customer (D2C) channels, Total Addressable Market (TAM) expansion, and affordability initiatives in FY25 are driving the recovery. The company's D2C strategy got a boost after its acquisition of skincare brand Minimalist and ramped-up digital advertising, which now accounts for 40% of its total ad spends. As part of TAM expansion, HUL recently introduced premium global brands from its parent portfolio, including Liquid IV (a hydration supplement) and Hourglass (a cosmetics line), targeting urban aspirational consumers. To improve rural and value-market penetration, the FMCG giant launched affordable packs like Rin Liquid at ₹99 and Bru Coffee sachets priced at just ₹2. According to Nuvama, HUL's Fabric Wash and Household Care segments posted high single-digit volume growth in FY25, and this momentum is expected to continue. Despite elevated palm fatty acid distillate (PFAD) costs, analysts believe easing input prices may support margin improvements going forward. Additionally, HUL reported a 200-basis point improvement in its product mix towards 'Future Core' and 'Market Makers' segments, aligned with its long-term growth strategy. The company's return on equity (RoE) improved to 20.5%, while return on capital employed (RoCE) rose to 28.7%. Disclaimer: The information provided is for informational purposes only and should not be considered financial or investment advice. Stock market investments are subject to market risks. Always conduct your own research or consult a financial advisor before making investment decisions. Author or Business Upturn is not liable for any losses arising from the use of this information. Ahmedabad Plane Crash Aditya Bhagchandani serves as the Senior Editor and Writer at Business Upturn, where he leads coverage across the Business, Finance, Corporate, and Stock Market segments. With a keen eye for detail and a commitment to journalistic integrity, he not only contributes insightful articles but also oversees editorial direction for the reporting team.
