Buy Hindustan Unilever; target of Rs 2850: Motilal Oswal

BUY

Motilal Oswal's research report on Hindustan Unilever

Hindustan Unilever’s (HUVR) 3QFY25 revenue was up 2% at INR155.9b (in line), with flat underlying volume growth (est. 1%, 3% in 2QFY25). Demand recovery continues to witness a delay, with urban consumption reeling under pressure. The higher share of LUPs has further impacted the mix for underlying volume growth (UVG). Near-term growth pressure is expected to sustain despite healthy rural demand. The company’s own initiatives are inspiring, but urban recovery is essential for translating them into volume pickup. Home Care maintained high-single-digit volume growth and clocked 5% revenue growth. Fabric Wash and Household Care sustained strong growth. The segment continues to see margin expansion, with a 10% YoY EBIT growth.

Outlook

HUVR is expected to take corrective actions to address the white space, particularly in B&W and Foods. The company commands strong leadership in Home Care, which can be capitalized during improving macros. We reiterate our BUY rating with a TP of INR2,850 (55x on Dec’26E EPS).

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