Hindustan Unilever Q4 Review: Brokerages Split With Target Hike And Cut After Volume Growth His 15-Quarter High
Hindustan Unilever Ltd. reported March quarter earnings above estimates, with volume growth at a 15-quarter high, while brokerages took mixed calls, including one target price increase and one reduction.
Brokerages expect growth to improve in FY27 compared with FY26, supported by pricing actions and cost measures. Input cost pressures and competitive intensity remain key factors to track.
The quarter saw volume growth of 6%, the highest in 15 quarters, indicating an improvement in underlying demand. Profit after tax rose 21.4% year-on-year from Rs 2,464 crore. Revenue increased 7.6% from Rs 15,190 crore in the same period last year.
Earnings before interest, tax, depreciation and amortisation stood at Rs 3,841 crore, ahead of estimates of Rs 3,754 crore. EBITDA margin was 23.5%, compared with 23.1% expected and 23.8% a year earlier. The company reported a one-time gain of Rs 247 crore during the quarter, compared with a loss of Rs 134 crore in the year-ago period.
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Here's what brokerages said after the results:
Morgan Stanley
- Maintain Equal-weight; Hike TP to Rs 2,480 from Rs 2,372
- Improving near-term growth visibility
- Pricing support could help drive overall earnings growth in FY27
- This supports near-term stock performance
- FY27 growth is expected to be higher than FY26
- Volume and pricing drivers of growth could rebalance
- Inflation to be managed through cost savings and further price increases
Citigroup
- Maintain Buy; Cut TP to Rs 2,750 from Rs 2,850
- Portfolio transformation gaining traction; volatility manageable
- FY27 likely to see a calibrated volume-value rebalance
- The company has taken 2-5% price increases to offset around 10% cost inflation, with further actions likely if volatility persists
- Seen well placed to manage inflation and gain share from regional players
Jefferies
- Maintain Buy with unchanged TP of Rs 2,850
- Management sounded confident in managing the growth-margin balance
- Volume growth remains the primary focus with emphasis on fewer, larger bets
- Consolidated revenue grew 8% YoY with 6% volume growth
- EBITDA grew 6% YoY with margin at 23.5%
- Input cost inflation of 8-10% linked to West Asia developments
- Price increases of 2-5% implemented across the portfolio
Macquarie Group
- Maintain Outperform with TP of Rs 2,860
- Q4 EBITDA beat supported by stronger sales growth
- Volume growth of 6% came slightly ahead of estimates
- Growth seen across home care, beauty and nutrition
- FY27 growth expected to be higher than FY26
- EBITDA margin guidance maintained at 22.5%-23.5%
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