Buy Hindustan Unilever; target of Rs 2840: Anand Rathi

Anand Rathi's research report on Hindustan Unilever

HUL’s Q4 was broadly in line with the Street’s expectations, with volumes growing 2% y/y (vs. 0-2% estimated) and the EBITDA margin at 22.8% (vs. 23%). Urban demand was soft; however, the company is optimistic about growth picking up ahead, helped by healthy rural demand, the Budget’s consumption boost, lower commodity inflation and normal monsoon forecast. Also, it plans to invest in brands (especially in the B&W segment) to drive volumes and innovation, which could weigh on margins in the near term.

Outlook

Thus, management has lowered its EBITDA margin guidance for the near term to 22-23% but retained it at 23-24% for the medium term. To factor in the above, we lower our FY26e/27e EPS by 2% each. We retain our Buy rating, with a 12-mth lower TP of Rs 2,840 (Rs2,900 earlier), 53x FY27e EPS.

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Hindustan Unilever - 28042025 - anand