Hindustan Unilever Limited (HUL) shares slipped almost 4% in today’s trade after global brokerage CLSA reiterated its ‘Underperform’ rating on the FMCG giant, maintaining a target price of ₹1,966 per share. The brokerage noted that HUL’s near-term growth outlook remains constrained despite management’s focus on innovation and volume-led recovery.
According to CLSA, HUL continues to emphasize portfolio renovation and category-specific strategies to revive volumes. The brokerage highlighted that the home care segment is witnessing traction in liquid detergents, but overall price growth remains negative. In the beauty and personal care segment, skincare continues to perform well, though personal care volumes have seen a decline. Meanwhile, the foods portfolio recorded a modest 3% year-on-year growth, supported by low single-digit underlying volume growth (UVG).
CLSA also pointed out that competitive pressures remain high, particularly in mass categories where affordability and pricing are key drivers. While the management’s renewed focus on innovation, value offerings, and affordability could gradually aid recovery, sustained rural demand and consistent category innovation will be crucial for a meaningful turnaround.
The brokerage further stated that HUL’s stock is likely to remain rangebound in the near term unless there is a visible improvement in pricing power or a sharp expansion in margins.
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