Hindustan Unilever Ltd. shares rose more than 3% in early trade on Tuesday after brokerages retained a constructive view on the FMCG major despite its June-quarter earnings missing Street estimates. Goldman Sachs and Citi lowered their target prices following the results, while Jefferies, Morgan Stanley and Macquarie maintained their ratings.
The stock climbed as much as 3.2% to an intraday high of Rs 2,092.40 and was trading at Rs 2,087.70, up 3.2%, around 10 a.m.
The brokerage commentary suggests investors are looking beyond the quarterly miss, with analysts citing stable demand, premiumisation and resilient margins as reasons to remain positive on the company's outlook for FY27.
Hindustan Unilever reported consolidated revenue of Rs 17,341 crore for the June quarter, up 10% year on year but below the Bloomberg estimate of Rs 17,571 crore. Net profit declined 3% to Rs 2,673 crore against the Bloomberg estimate of Rs 2,811 crore. EBITDA rose 8.4% to Rs 3,947 crore, while the EBITDA margin narrowed to 22.8% from 23.1% a year earlier. Underlying volume growth came in at 5%, below Street expectations of 6% to 8%.
Management said demand remained stable across urban and rural markets despite inflationary pressures.
Jefferies maintained its "buy" rating with a target price of Rs 2,850, saying the recent share price decline appeared excessive given the limited earnings miss and constructive management commentary.
Goldman Sachs retained its "buy" rating but cut its target price to Rs 2,450 from Rs 2,725, saying revenue growth should accelerate through FY27 as pricing actions and recovery in Beauty & Wellbeing gather pace.
Citi maintained its "buy" rating and lowered its target price to Rs 2,650 from Rs 2,750, citing stable demand, improving execution and premiumisation.
Morgan Stanley retained its "equal-weight" rating with a target price of Rs 2,480, while Macquarie reiterated its "outperform" rating with a target price of Rs 2,860, saying the quarter was broadly in line with expectations and the long-term FMCG demand outlook remains intact.
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