
Hindustan Unilever (HUL) has received mixed reviews from leading brokerages following its Q3 performance. While some highlight long-term growth prospects and margin improvements, others remain cautious due to weak volume growth and lower consumer demand. Here’s what brokerages are saying:
Brokerage Ratings and Target Prices
Brokerage | Rating | Target Price (₹) | Potential Upside/Downside from CMP (₹2,340) |
---|---|---|---|
UBS | Neutral | 2,700 | +15% |
CLSA | Underperform | 1,924 | -18% |
Goldman Sachs (GS) | Neutral | 2,480 | +6% |
Nuvama | Buy | 3,225 | +38% |
Investec | Hold | 2,643 | +13% |
Detailed Brokerage Insights
UBS: Neutral, Target ₹2,700
- Positives: Revenue growth was broadly in line, led by volumes in the home care segment.
- Concerns: Weak product mix impacted UVG (underlying volume growth), and personal care faced pressure from price hikes.
- EPS estimates for FY25-27 were cut by 1-5% due to near-term demand weakness.
CLSA: Underperform, Target ₹1,924
- Key Observations: Weak growth and lower margins in Q3; three of four segments saw UVG decline.
- EPS Cuts: FY25-27 EPS estimates were reduced by 4-6%.
- Concerns: The acquisition of Minimalist, though strategic, signals management’s focus on growth over margin stability, especially in beauty and wellness.
Goldman Sachs (GS): Neutral, Target ₹2,480
- Takeaways: Q3 results missed expectations on volume and EBITDA growth, with urban slowdown and downtrading to smaller packs observed.
- Insights: Soap volumes were impacted by higher price increases and grammage cuts, while the Minimalist acquisition was seen as a fair and complementary move.
Nuvama: Buy, Target ₹3,225
- Positives: Overall Q3 results were in line, despite volume growth being below expectations.
- Changes: EPS for FY25/26/27 has been cut by 3-5%, citing current raw material inflation.
Investec: Hold, Target ₹2,643
- Concerns: No near-term recovery is expected, with challenging growth outcomes reflecting weak demand trends in the sector.
- Insights: The Minimalist acquisition is likely to contribute less than 1% to FY26E sales, and visible triggers for revenue growth will determine HUL’s earnings and stock price performance.
Conclusion: Diverging Views on HUL
Brokerages remain divided on Hindustan Unilever, with target prices ranging from ₹1,924 (CLSA) to ₹3,225 (Nuvama). While some highlight strong execution and strategic acquisitions, others are concerned about weak UVG, demand slowdown, and margin pressures.
At its current market price of ₹2,340, the stock offers potential upside of up to 38% (Nuvama), while CLSA sees a downside risk of 18%.
Disclaimer: This article is for informational purposes only and does not constitute financial advice.