Government should keep watch on inflation: HUL Chairman Sanjiv Mehta

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The government should keep a track on inflation, which does not become wide spread and also keep a track on the consumption pulse and the underlying demand, Hindustan UniLever (HUL) Chairman Sanjiv Mehta said in an interview with The Economic Times, a day after HUL announced its second quarter results. The company posted a 11% growth in sales and 9 percent increase in profit for the quarter ending September as compared to the same quarter in the previous year, but warned of margin pressure due to increasing commodity costs.

Demand scenario

This comes on the back of higher base, while urban growth has picked up with improved mobility. It said that the government’s focus on opening up the economy in a calibrated manner so more people can get jobs, which will lead to a virtuous cycle of economic growth.

Mehta said that the underlying demand has not faded way, though the last few readings of Neilsen do indicate that the market has slowed down especially in rural areas. He added that the government’s biggest focus on vaccinations will pay dividends and they should keep mutations under check, in addition.

Mehta also said that hyperinflation in commodities used by ordinary consumers will increase the Ebidta margin by 100 basis points per annum would not be sensible. He also said that there are commodities where the rise in costs are close to 1.8 times of last year, but are not increasing prices anywhere close to that.

The company said that it is looking to leverage data and tech capabilities, started a couple of years ago. But the pandemic accelerated the shift in terms of handling big data, both in terms of trends and consumer insights.