Hindustan Unilever: Lack of double-digit earnings growth could curb enthusiasm

研报英文原文证据摘录

Hindustan Unilever: Lack of double-digit earnings growth could curb enthusiasm

Global Markets Research

Hindustan Unilever HLL.NS HUVR IN 29 July 2026

EQUITY: GENERAL CONSUMER

Lack of double-digit earnings growth could curb enthusiasm Rating Remains Buy

1QFY27: Consolidated volume/Sales growth of 5%/10% y-y was inline with our estimate, but below Target price

INR 2,450street expectations of 7%/12% y-y; OPM at 22.8% vs street expectation of 23.5% Reduced2,650 from INR

Sequential improvement continues, but need more Closing28 July 2026price INR 2,023

While results were in line with our expectations, we think the sharp share price correction of 7% after the

results announcement was a function of high expectation on the street. In the past one year since Ms. Implied upside +21.1%

Priya Nair has taken over as HUL MD and CEO, we note that HUL has shown sequential performance

improvements in both volumes (Fig.7) and sales (Fig.9). It has also managed OPM well within a narrow- Market Cap (USD mn) 49,579.0

band of 22.5-23.5% (guided range) despite input cost volatility (Fig.12). In 1Q, GPM/OPM contracted by ADT (USD mn) 47.7

only 80bp/35bp y-y to 49.5% / 22.8%, supported by price hikes, accelerated savings funnel, and

optimization of media spending. Despite a price hike of 5%, management highlighted that the demand Relative performance chart

environment was stable and shared a similar outlook highlighting the price hike was absorbed without any

volume backlash. While valuation is at 2-SD below its 10yr average, we believe investors’ expectations are

for earnings to grow at double-digit+, only after which, we expect interest to return to the stock.

Broad-based growth across categories (except soaps, tea), channels and regions (Fig.3)