HUL Shares Up 4% as Priya Nair Takes Over the Top Role; Dalal Street Remains Optimistic on Leadership Change

Hindustan Unilever Ltd (HUL) shares soared 4.5% to ₹2,518.65 on BSE after the company appointed Priya Nair as its first woman CEO. The move has sparked optimism in the dalal street, signalling a dramatic shift in India's most closely-watched FMCG company.

Nair’s appointment comes at a critical juncture, as the company is reeling from sluggish growth and cut-throat competition from emerging D2C players and new-age brands.

Priya Nair’s Track Record at HUL

Priya Nair has been instrumental in transforming underperforming segments into profitable businesses. While serving as Executive Director of Home Care between 2014-2020, the EBIT margin of the segment skyrocketed by 570 basis points from 13.1% in FY14 to 18.8% in FY20. This performance in turn led to a surge in HUL's EBIT margin from 15.0% to 22.3%.

“We see the appointment of Ms Nair as a positive,” said Nomura in a research note. “We believe this change of guard will provide HUL with the required boost vs peers to navigate competitive challenges, accelerate its digital transformation efforts, and capitalize on the evolving and long-term prospects of the Indian consumption market.”

Nair also played a key role in steering HUL's portfolio in the premium segment, which shot up to 26% against 20% in 2020.

Nair currently serves as the Group President of Beauty & Wellbeing, overseeing a $13 billion portfolio spanning Hair Care, Skin Care, Prestige Beauty, and Health & Wellbeing brands across more than 20 markets.

Will the Leadership Change Deliver Results?

The timing of Nair's appointment comes as no surprise. Unilever's new global CEO, Fernando Fernandez considered India as one of the most important markets for the company’s global portfolio during his first quarter investor call.

“We see the change of guard at HUL as Unilever's strong commitment and seriousness to deliver improvement and outperformance from India,” Nomura analysts noted.

HUL has been grappling with weak growth as the company’s volume, revenue, and earnings have grown by only 2-3% in the last two years due to the challenging macroeconomic environment and increased competition from new brands.

Despite several challenges, analysts are optimistic about Nair’s leadership. Noumra has maintained a target price of Rs 2,600, valuing the stock at 50x June 2027 P/E.

Nair is set to take charge on August 1 for a five-year tenure. Investors will be closely assessing her leadership, as expectations remain high to bring the FMCG giant back on track.