Accumulate Hindustan Unilever; target of Rs 2601: Prabhudas Lilladher

Prabhudas Lilladher recommended accumulate rating on Hindustan Unilever with a target price of Rs 2601 in its research report dated April 25, 2025.

Broker Research

April 25, 2025 / 19:57 IST

Accumulate

Prabhudas Lilladher's research report on Hindustan Unilever

We cut FY26/FY27EPS by 3.1/3% factoring in 80/50bps cut in margins to 22.7/23.3% in FY26/27 as HUVR transitions through the inflationary phase and invests in Innovation, new products, A&P, distribution channel etc. to push for growth as it expects demand recovery to set in. HUL continues to focus on transforming its portfolio contribution from Core to Future Core & Market Mover. HUVR is making a big push in premium segments in Beauty and wellbeing to regain lost ground by acquisitions and new launches, which should start showing impact by end of 1H26. HFD turnaround seems tough given changes in category salience over the years. HUVR expects things to settle and margins to show an uptick post 1H26, which will be a key determinant in the near term.

Outlook

We expect just 3.5% EPS growth in FY26 but 9.5% growth in FY27 (6.4% CAGR) which can result stock returns being slack in the near term. We assign DCF based target price of Rs 2601 (Rs2667 earlier), implying target PE of 52.8x FY27. Retain Accumulate.

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