Unilever sees major India opportunity on GST cuts and strong GDP growth

Hindustan Unilever (HUL) is consistently ranked as Unilever's second-largest market globally by revenue, after the United States, with India contributing around 12-14% of total sales

India, with a high GDP growth and recent GST reduction, presents "massive" opportunities for British multinational consumer goods maker Unilever and its Indian arm Hindustan Unilever, according to a top company official.

The companies believe they will be the main beneficiaries of a much more dynamic economic environment in India, said Unilever Chief Executive Officer Fernando Fernandez.

Indian consumption was significantly affected over the last three years due to double-digit food inflation, said Fernandez in a JP Morgan Fireside Chat.

"I feel the government in India has taken very relevant measures lately. So, GST reduction, that is the VAT of India, personal income tax reduction, interest rate reduction, when the government does something like this, it's because things in the economy are not right, and really that's what's happening the last couple of years," he said.

Moreover, there is some food deflation and have seen immediately in the Indian GDP growth.

"I think in the last quarter it was 8.2 per cent. So I see a lot of opportunities in India. This GST reduction affects 40 per cent of our portfolio," he said, adding, "I believe the GST reduction, the impact on the whole economy will be very, very significant.

Unilever has recently made changes in the top leadership of HUL by appointing Priya Nair as the new CEO.

"We have brought also another two CEOs into our Indian leadership team, the CEO of Hero MotoCorp, as the CFO of the company, the CEO of Britannia, as a head of our Food business. They have the mission of really putting our volume growth in similar level to the one of GDP growth, it will take some time, but I'm very confident of the opportunity," he said.

Fernandez, who was in India recently on an official visit, said, "Opportunities there are massive," noting that India has 60 million people with a per capita income comparable to France.

"You have 700 million with income per capita of Indonesia, Thailand, Philippines and another 700 million with the income per capita of East Africa and West Africa. There is growth for everyone in India. And we believe that we will be the main beneficiaries of what will be a much more dynamic economic environment in India," he said.

He said:" Our brands are perfectly suited to really take advantage of what will be an explosion of wealth expansion. So I'm super excited with India."  Hindustan Unilever (HUL) is consistently ranked as Unilever's second-largest market globally by revenue, after the United States, with India contributing around 12-14 per cent of total sales.