HUL’s 15% sales jump meets a 9.3% ad-spend cut

Hindustan Unilever’s September-quarter results put a familiar FMCG assumption under pressure. The company grew faster than it has in 14 quarters while spending less on advertising and promotion. The numbers are large enough to matter beyond HUL’s own boardroom: it is one of India’s biggest advertisers, and the way it spends shapes media budgets across the ecosystem.

01 · The headline numbers

HUL reported 15% underlying sales growth in Q2 FY27, with turnover at ₹18,071 crore. That is the strongest growth in 14 quarters. Yet consolidated advertising and promotion, or A&P, expenditure fell 9.3% year on year to ₹1,481 crore, compared with ₹1,632 crore in the same quarter last year, a decline of ₹151 crore.

Underlying volume growth was 7%, even as the company took price increases of about 7.5%. That combination suggests demand held up across several categories. But profitability did not keep pace: EBITDA rose 8% to ₹4,089 crore, and the EBITDA margin narrowed 140 basis points to 22.6%, from 24% a year earlier.

02 · Marketing productivity or cost pressure?

The drop in A&P is not automatically a sign of sharper marketing. HUL is also absorbing higher input costs, and its CFO Niranjan Gupta has said commodity inflation is expected to remain elevated in the short term. When margins are under pressure, advertising budgets often come under scrutiny—but lower spending and higher marketing productivity are not the same thing.

HUL’s spending as a share of turnover fell to 8.2% from 10.4% a year ago, a noticeable shift for a company whose brands have historically been visible across media. The reported figure combines advertising and promotion and does not reveal how the reduction was distributed across brands, channels or consumer activities.

03 · What the portfolio reveals

HUL continued to invest behind launches during the quarter, which complicates any simple “spending less” story. It expanded Dove’s premium body-serum range, extended Minimalist’s skincare and haircare lines, relaunched Lux Bar and stepped up sampling for body wash. In foods, Horlicks entered the protein segment and Kissan refreshed its condiments proposition.

CEO Priya Nair, who took over in August 2025, called the volume momentum a positive demand signal. “The fact that there is volume momentum while we are taking price increases is a very good sign for overall demand,” she said.

04 · What brand leaders should watch

• Segment the cuts. Home care grew 22% but its margin fell; beauty and wellbeing grew 16% at a 28.6% margin. Different categories need different investment logic.
• Track share of voice against market share. A falling A&P ratio is only reassuring if brands keep their salience and conversion.
• Look beyond one quarter. For H1 FY27, A&P spend fell 2.8%, far less than the quarterly drop, so timing and campaign phasing may explain part of the decline.

For HUL, the task is to prove that tighter ad budgets are buying sharper returns, not quietly drawing down brand equity. For everyone else, it is a live case study in whether growth can be decoupled from spending in a price-sensitive market.

Source: Indian Advertising Media & Marketing News – exchange4media

Mad About Marketing Desk The strategists and writers at Mad About Marketing, writing up what we see in the work every week.