Following a meeting with the company’s management, JPMorgan said HUL continues to see a stable demand environment, supported by calibrated pricing actions, a resilient rural business and ongoing premiumisation trends in urban markets.
Also read: Why Morgan Stanley bets on ONGC but downgrades its peer Oil IndiaAccording to the brokerage firm, management highlighted urban premiumisation as a key growth engine, while rural demand remains steady and supportive of volume growth.
It said HUL’s ongoing organisational restructuring, aimed at improving execution across business units, alongside its omnichannel strategy spanning quick commerce and general trade specialist channels, should help sustain the company’s improving revenue growth trajectory.JPMorgan identified liquids within the Home Care and Personal Care segments, premium Beauty & Wellbeing brands, and the expanding Foods portfolio as HUL’s primary growth drivers over the medium term.
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On profitability, management guided for EBITDA margins in the range of 22.5% – 23.5% for FY27 despite inflationary pressures. JPMorgan noted that pricing actions, cost efficiencies and overhead optimisation are expected to offset nearly 10% input cost inflation.
The brokerage added that gains from premiumisation-driven gross margin expansion are likely to be reinvested into brand-building initiatives to support long-term growth.
41 analysts have coverage on Hindustan Unilever, of which 29 of them have a “buy” rating on the stock, nine say “hold” and three have a “sell” rating. The consensus estimates of price targets have imply an upside potential of 21% from Tuesday’s closing levels.
Shares of Hindustan Unilever are trading 2.6% higher on Wednesday at ₹2,188. The stock is down 5% over the last one month and by a similar quantum for the year so far as well.
