Finance1 min read

HUL shares rise 3% after Q2 results. Jefferies, Nomura cut target price but forecast 29% upside potential

By · Published by Everything Blog

In short

HUL delivered a 15% year-on-year increase in second-quarter revenue to Rs 18,226 crore, supported by sequential improvements across rural markets. Management expects consolidated EBITDA margins to remain stable between 22% and 24% despite persistent commodity cost pressures. Meanwhile, brokerages such as Jefferies, Nomura, and JM Financial lowered their price targets due to potential volume strain and sector de-rating. Nomura highlighted that second-quarter volume growth reached 7%, successfully surpassing its initial estimates.

Key points

  • Hindustan Unilever expects consolidated EBITDA margins to remain stable within the 22% to…: Hindustan Unilever expects consolidated EBITDA margins to remain stable within the 22% to 24% range despite ongoing commodity inflation.
  • Brokerages adjusted their target prices downward to reflect agricultural uncertainties, p…: Brokerages adjusted their target prices downward to reflect agricultural uncertainties, price hike pressures, and a 14% three-month stock correction.
  • Chief Executive Officer Priya Nair affirmed the company will focus on competitive, volume…: Chief Executive Officer Priya Nair affirmed the company will focus on competitive, volume-led profit growth amid a resilient domestic economy.

Sources checked by our analysis pipeline: 1

The company’s revenue from operations came in at Rs 18,226 crore, up 15% from Rs 15,919 crore posted in the corresponding quarter of the previous financial year.

The company expects performance to improve in FY27 compared with FY26, driven by portfolio and channel transformation. However, commodity inflation is likely to persist in the near term, with the company guiding for its consolidated EBITDA margin to remain within the current range of 22-24%.

Should you buy HUL shares?

Jefferies has retained a Buy call but with a reduced target price of Rs 2,350 (29% upside). The brokerage said calibrated price hikes and cost efficiencies will help protect margins. Jefferies expects the impact of inflation to persist in the short term, while HUL's portfolio, largely comprising daily essentials, remains relatively less elastic to price changes. Both urban and rural markets continue to report broad-based growth, with volume-led growth remaining a key priority for the company. HUL has also retained its medium-term margin guidance of 22-24%.“We expect HUL to see volume-led growth, aided by improved, favourable government policies and a low base. This…

Finance