Morgan Stanley has maintained its equal-weight rating on Hindustan Unilever (HUL) with a target price of ₹2,335 per share, noting that the company’s second half of FY26 (H2) is expected to outperform the first half, supported by a gradual normalisation of trading conditions and steady demand across both rural and urban markets.
The brokerage said that price growth is likely to stay in low single digits during H2FY26, while the winter and harvest seasons remain key factors to monitor. During Q2FY26, HUL’s volumes were impacted by around 2% due to the GST transition, though sequential gross margins improved by 135 basis points, partially offset by higher trade support costs.
Morgan Stanley highlighted that trading conditions are expected to normalise by early November, with trade pipelines returning to their usual 4–6 week levels in the coming months. The brokerage also noted that the planned demerger of the ice cream business could add 50–60 basis points to HUL’s overall margins.
The firm remains watchful on price elasticity trends and competitive intensity but said stable rural sentiment and resilient urban demand continue to support HUL’s growth outlook.
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