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Nirmal Bang Report
Hindustan Unilever Ltd. reported a healthy set of June-quarter numbers, supported by improving volume growth and strong performances across key categories.
However, brokerage firm Nirmal Bang has maintained its 'Hold' rating on the FMCG major, citing rich valuations despite raising its target price to Rs 2,295 from Rs 2,240, implying a potential upside of 13% from current levels.
HUL Q1 Results Highlights
HUL's Q1 FY27 standalone turnover (including other operating income-OOI) grew 9.8% YoY at Rs 16,600 crore (vs estimate of Rs 16,700 crore).
Ebitda grew 8.3% at Rs 3,760 crore (vs est. of Rs 3,590 crore). Adjusted PAT increased 8.7% YoY at Rs 2,700 crore (vs estimate of Rs 2,450 crore).
Underlying volume growth (UVG — a function of volume growth and mix) was 5% for the quarter (vs est. of 6% volume growth). Gross margin came in at 48.4% (down by 40bps QoQ) and Ebitda margins contracted to 22.6% for Q1 FY27
View and valuation:
There is no material change to brokerage's EPS forecasts; however, Nirmal Bang remains structurally positive on HUL's long-term growth prospects, supported by premiumisation, portfolio transformation, and continued execution improvements.
The brokerage continue to value the stock at 45x Jun-28E EPS, implying a ~18% discount to its 10-year average P/E of 54.9x. This results in a revised target price of Rs 2,295 (earlier Rs 2,260), offering a potential upside of 13.4% from the current market price.
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