Sudhir Sitapati, executive director, Hindustan Unilever, recently turned author with ‘THE CEO FACTORY’ on management lessons from HUL. While speaking about the book to Mangalam Maloo, he added that the company is continuously seeking cost reduction measures and growth despite the uncertainty around current demand situation.

“HUL has been around for 100 years and there have been major ups and downs. In most of these periods HUL has managed to navigate it. So regardless of what situation is emerging and every year is different in India. It’s not unique to this year or last year, but HUL has always got some trick up its sleeves somewhere to compete in the market,” said Sitapati.

He said that it was unprecedented when HUL offered to pay tax benefit amount to the government. What couldn't be passed on the consumer went back to the government, Sitapati added.

Talking about growth, he said, “Through the history of HUL it has balanced between topline growth and bottomline growth depending on the circumstance and the important thing and that’s the phenomenal story of HUL’s earnings story is there are periods like the early ‘90s where we were growing topline at high teens.”

“There are periods where we have been growing balance of topline and bottomline. So, the important thing about HUL and what HUL navigates well is balancing between costs and revenues,” he added.

On margins front, Sitapati said, “HUL is famous for being marketing powerhouse. What is less known about HUL is it’s a cost powerhouse and it’s a phenomenal cost powerhouse. So the question to ask is twofold. The questions to ask is – are our brands giving consumer value and should we go after cost all the time. The answer is yes, as long as there is cost. It’s our job to go after it. Margins are consequence of that.”

“The company’s philosophy has been to chase consumer value and to do it in a most efficient possible manner and my reckoning is fixed costs are roughly half your cost and half your variable costs are fixed. So the more you grow volumes the more your margins expand,” he added Sitapati.

When asked about slowdown, he said he was unable to say when the economic slowdown will end.

First Published:Dec 27, 2019 8:46 AM IST