Shares of FMCG bellwether Hindustan Unilever (HUL) rebounded 2.2% to Rs 2,067 on the BSE on Wednesday after a host of brokerages turned bullish on the stock following the company's Q1 earnings and management commentary. In the previous session, the stock had plunged more than 7% to a 52-week low of Rs 2,019.
The FMCG major reported a 3% year-on-year (YoY) decline in consolidated net profit to Rs 2,673 crore for the first quarter of FY27, missing analysts' estimates. It had posted a net profit of Rs 2,756 crore in the corresponding quarter last year.
Hindustan Unilever attributed the decline in profit after tax (PAT) to a one-off tax credit recorded in the year-ago period. Despite the drop in profit, revenue from operations rose 10% YoY to Rs 17,341 crore in Q1 FY27 from Rs 15,757 crore in the corresponding quarter of the previous financial year.
The company reported underlying sales growth (USG) of 10%, with volume growth and pricing contributing equally. This marked HUL's strongest quarterly growth in the last 13 quarters.
Also read: HUL upside maybe limited as margins face cost pressure
EBITDA rose 8% YoY to Rs 3,947 crore in the quarter, compared with Rs 3,640 crore a year earlier. However, the EBITDA margin contracted by 40 basis points to 23% from 23.4%, according to the company's investor presentation.
What are analysts saying?
Morgan Stanley on HUL share price
Morgan Stanley has maintained its 'Equal Weight' rating on HUL with a target price of Rs 2,480, implying an upside potential of 23%. The brokerage flagged sequentially weaker volume growth as the key negative takeaway from the latest earnings. However, it viewed the company's double-digit revenue growth and optimistic management commentary as positives.
Nuvama on HUL share price
Nuvama has maintained its 'Buy' rating on HUL with a target price of Rs 2,820, implying an upside potential of 40%.
The brokerage noted that inflation in key raw materials—including crude-linked inputs, palm oil, and tea—remains elevated, limiting near-term margin expansion and making further calibrated price hikes necessary.
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During the earnings call, HUL said that despite a 15%–20% rainfall deficit, it does not expect any meaningful impact on the broader economy or consumption. The company also highlighted its AI-led investments across research and development, manufacturing, supply chain, and marketing to accelerate innovation and improve execution efficiency. HUL added that it continues to follow a disciplined approach to pricing and cost management amid volatility in raw material prices.
JM Financial on HUL share price
JM Financial has upgraded Hindustan Unilever (HUL) to 'Buy' from 'Add' and raised its target price to Rs 2,425, implying an upside potential of 20%.
The brokerage believes the initiatives under HUL's new CEO—including sharper portfolio interventions, higher investments across categories, and stronger omnichannel execution—are moving in the right direction. It noted that the benefits are already visible in the acceleration of sales growth over the past few quarters.
Management's guidance on demand trends and margin delivery remains unchanged. JM Financial believes the current inflationary environment could work in HUL's favour by enabling it to gain market share from unorganised and regional players. The brokerage also said the company has sufficient levers to navigate the prevailing volatile environment.
