Despite a slower growth in the rural market, the country’s largest consumer goods maker Hindustan Unilever has managed to grow its volumes growth by 4 per cent on the back of price cuts in few categories, aggressive marketing and new product launches.

For the maker of brands like Dove and Ponds, rural market contributes about 40 per cent of the overall revenues. For HUL, rural was growing at twice the rate as urban growth in 2011-12.

Sanjeev Mehta, CEO, HUL, while admitting the fact that rural economy was under pressure, said that it will remain under stress in the medium to long term. Mehta is hopeful that a good monsoon will revive the economy, and thus, help boost the company's revenues further. 

“The rural economy has just slowed down but it is still growing.

“The top end of the rural market are clamouring for the same kind of products that a consumer in tier II, III market uses," he said.

He added that the government is taking steps to revive the market and the company is also working towards developing the market for consumers.

The company, in the fourth quarter of fiscal 2015-16, posted a 4 per cent increase in volume growth. While net sales rose 3.3 per cent to ₹7,809 crore, profit went up by 7 per cent at ₹1,098 crore.

HUL's Chairman Harish Manwani said that 2016 was also the year when the company cut prices due to the fall in raw material prices. 

He said with crude oil and vegetable oil prices rising, HUL’s portfolio is unlikely to see deflationary pressure in the year ahead. 

Product extensions He also stressed on the point that given the kind of demand arising for natural/ayurvedic products, the company is likely to launch and have some product extensions in that category.

“Patanjali growth is good for the competition and we expect more players to enter and grow the category,” Manwani added. 

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