HUL Q2 Review: Systematix Maintains 'Hold' Rating, Hikes Target Price — Here's Why

Hindustan Unilever delivered a slight beat on Q2 FY26 operating earnings with in-line revenues, in a quarter marred by GSTrelated trade disruptions. Gross margin declined 20bps YoY but expanded 130bps QoQ to 51.4% largely due to narrower price-cost gaps in key categories of tea and soaps..NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Systematix Report.We believe a confluence of improving demand trends in key categories (soaps, nutrition, skin, tea, detergents) can drive meaningful uptick in Hindustan Unilever Ltd.’s volume growth, which likely gets accentuated over FY27E-FY28E as HUL rejigs its portfolio to expand into high-growth categories (premium beauty, laundry/dishwash liquids, bodywash, international foods, high-science products in nutrition) and launches products to extract growth in portfolio gaps (such as Comfort Perfume Deluxe, Oziva skin care supplements, Horlicks Pro Fitness). We also expect a pickup in operating profit margin over H2 26-FY28E driven by-ice cream business demerger, mix improvement andbetter operating leverage as volumes pick up. However, with valuations looking full (stock trades at P/E of 56x on FY27E EPS), we remain cautious on the name. .Valuation: We lower our FY26E-FY28E revenue (and PAT) estimates by 1-4% mainly to factor in separation of the ice cream business, and build revenue/PAT CAGR of 6%/5% over FY25-FY28E. We maintain our Hold rating; we roll forward valuation to September-2027E EPS (from June-2027E) and value the stock at P/E of 54x (in-line with its past long-period average), leading to a target price of Rs 2,650 (vs Rs 2,575 earlier)..Click on the attachment to read the full report:.HUL Q2 Review: Jefferies, Citi Turn Bullish, Investec Stays Cautious — Which Target Will Prove Right?.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

HUL Q2 Review: Systematix Maintains 'Hold' Rating, Hikes Target Price — Here's Why

With valuations looking full, Systematix remains cautious on HUL.

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