Hindustan Unilever lifts capex to chase premium beauty in “New India”

Hindustan Unilever (HUL) is focusing on the “New India opportunity” and centering its next phase of growth around young consumers, social media, and AI-enabled content. 

India has emerged as a burgeoning market for the personal care industry as it has been propelling toward premiumization and social-led trends. According to the India Brand Equity Foundation, the country’s beauty industry is projected to grow from US$28 billion in 2024 to US$35 billion by 2028. 

The Dove and Lakmé maker plans to raise productive capital expenditure to 3% of turnover from around 2%. The move signals how the company is aiming to tap into the developing market and future-proof its spot as India’s largest FMCG company. 

HUL’s EBITDA margin was 23.6% in FY26, around 70 basis points lower than a year earlier. This declining momentum is leading the company to focus on enabling “growth and productivity.”

Priya Nair, CEO of HUL, said the company has had a lull in growth in the past two years due to a challenging operating environment, but that it has taken “decisive actions” over the last year to reset the business for stronger growth.

At the investor event Capital Markets Day 2026, HUL released plans to target volume-led profit growth and restructure its portfolio toward higher-margin categories. This endeavor is reflective of parent company Unilever’s Desire at Scale strategy, which has honed in on its beauty offerings, so much so that it led to it becoming a pureplay personal care company. 

India’s beauty billions 

HUL cites India’s growing young demographic and rising incomes as a basis for its plans.

Personal Care Insights recently reported on how India’s beauty and personal care market surpassed US$30 billion, fueled by rising incomes, urbanization, and the boom of e-commerce.HUL CEO says decisive actions have reset HUL for stronger growth. 

“The global beauty industry is increasingly looking toward India not merely as a consumer market but as a strategic hub for innovation, manufacturing, and product development,” said Ceyril Pereira, managing director at TEPL, the organizers of Cosmetica 2026.

At its Capital Markets Day, HUL told investors that it expects to unlock 500 basis points, worth 5% of total revenue. The gains would come from a richer premium mix, operating leverage, a new multi-year cost-savings program, and AI-led media effectiveness.

The savings create more spending opportunities for premiumization and market development. HUL also plans to direct 20% of incremental turnover into new spaces under its portfolio reshaping.

HUL is working to expand in high-growth segments through extending existing brands, introducing brands from parent Unilever, and pursuing “bolt-on acquisitions” to enter new categories. A bolt-on is a small acquisition that gets absorbed into an existing business rather than run as a standalone platform. 

Part of Unilever’s broader expansion into India came this summer. In June, it opened a fragrance hub in Mumbai. The consumer goods conglomerate called India is one of the most lively fragrance markets globally. It cited the country’s rapidly changing consumer preferences and growing demand for premium products.

The lab will leverage consumer insights, neuroscience technology, and AI feedback to produce fragrances that drive growth as part of the company’s Desire at Scale marketing strategy. 

Buying into India 

The Indian beauty market is commanding global attention, with major brands investing in the region’s fast-growing industry. 

One of the latest moves exemplifying this momentum was Wipro Consumer Care and Lighting announcing the acquisition of the made-in-India brand, Dermatouch. The deal marked Wipro Consumer Care’s entry into India’s expanding premium skin care market. 

Additionally, Amorepacific’s beauty brand Mamonde stepped up its expansion into the Indian market with an exclusive launch on Nykaa, India’s largest beauty and lifestyle platform. The entrance into the online retailer targets Indian Gen Z and millennials, who have been shown to be a lucrative opportunity in the digital beauty sphere. HUL is targeting India’s young consumers with premium beauty formats. 

Earlier this year, Innova Market Insights’ project lead for the Beauty Personal Care & Household division told Personal Care Insights that India’s beauty market is crowded, so brands that wish to succeed locally must develop strong storytelling and distinctive positioning to connect with local audiences.

“Since the COVID-19 pandemic, Indian audiences, especially the youth, have opened up to up-and-coming local brands beyond the large domestic names, such as Sugar, Dot & Key, Chemist at Play, and Bare Anatomy. These are conveniently supplied brands with a wide range of products that market to a youthful audience, especially young employees and college-goers, and align with their identity,” the lead says.