HUL Q3 Results Review: HDFC Securities Downgrades The Stock To 'Add', Lowers Target Price — Here's Why

Despite near-term challenges, HUL trades at attractive valuations, i.e., 44 times FY27 EPS, almost 20% below its five-year average PE of 55 times. .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. .HDFC Securities Institutional Equities.Hindustan Unilever Ltd.’s Q3 FY25 results were below our estimates, as performance was subdued across segments except home care. It managed to show flat Ebitda, as it drastically cut down brand-building spends (down 8% YoY). The home care segment was an outlier and saw the second consecutive quarter of high single-digit volume growth, owing to management's focus on premiumization. Persistent raw material inflation (palm oil) and the delayed winter season impacted soaps and skin care within the BPC segment, respectively, while downtrading (for tea) and muted consumption (malted food drinks) continued to affect the F&R segment. Management remains cautiously optimistic about rural recovery and will focus on driving moderate margin expansion in the medium term, using its pillars of driving the core, premiumization trends, and investment in categories of tomorrow, along with channels and formats of the future. We have cut our EPS estimates by 2-3% for FY26/FY27 and downgraded the stock to Add from Buy with a target price of Rs 2,650 (50 times FY27 EPS), as in the near term, volume/profitability growth remains challenging due to:macro challenges in urban areas, which in turn will decelerate premiumization trends;persistent inflation in palm oil and tea prices; andincreased competitive intensity in the high-margin beauty and well-being segment. Despite near-term challenges, HUL trades at attractive valuations, i.e., 44 times FY27 EPS, almost 20% below its five-year average PE of 55 times. We believe HUL could trade closer to its five-year average PE once confidence in volume growth delivery and profitability improves, which is contingent upon several macro factors..Click on the attachment to read the full report:.Persistent Systems Q3 Results Review: Growth Converging Across Verticals, Says Motilal Oswal — Retains 'Buy'.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 Q3 Results Review: HDFC Securities Downgrades The Stock To 'Add', Lowers Target Price — Here's Why

The brokerage has cut its EPS estimates by 2-3% for FY26/FY27 and downgraded the stock to Add from Buy, as the near term, volume/profitability growth remains challenging.

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