HUL stock rating: Brokerages bullish after Q2 results amid improving volumes, but cautious over margin pressure

Morgan Stanley has a target of Rs 2,480, followed by Jefferies at Rs 2,350 and HSBC at Rs 2,220. HUL shares ended 0.12 percent lower on Wednesday, following the announcement of its Q2 FY27 results. The stock has declined 21.8 percent so far in 2026, compared with a 13.2 percent fall in the Nifty 50. The company's market capitalisation stood at Rs 4.27 lakh crore. UBS highlighted HUL's strong quarterly performance, with revenue rising 14.8 percent year-on-year and underlying volume growth of 7 percent beating estimates.

Home Care revenue grew 22 percent, while Beauty & Wellbeing sales increased 16 percent. The brokerage also noted that EBITDA and profit after tax rose 8 percent and 8.7 percent, respectively, reflecting an overall strong performance. Morgan Stanley highlighted underlying sales growth of 15 percent and volume growth of 7 percent, with Home Care and Beauty & Wellbeing leading the expansion. However, the brokerage flagged a 142-basis-point year-on-year contraction in EBITDA margin to 22.6 percent amid inflationary pressures.

It nevertheless noted that consumer demand remained resilient. Jefferies highlighted HUL's 7 percent volume growth, its strongest in several quarters, alongside 15 percent revenue growth. Home Care and Beauty & Wellbeing recorded sales growth of 22 percent and 16 percent, respectively. While inflationary pressures persist, Jefferies remains positive on the volume recovery and demand outlook. HSBC marginally raised its price target while retaining its Buy rating, citing improving demand trends despite inflation and El Niño concerns.

The brokerage highlighted underlying sales growth of 14.5 percent and volume growth of 7 percent, with Home Care and Beauty & Wellbeing delivering double-digit volume growth. Hindustan Unilever reported a 14.5 percent year-on-year increase in revenue to Rs 18,226 crore for the September quarter, its strongest growth in 14 quarters, according to CNBC-TV18 data. Underlying volume growth stood at 7 percent, at the upper end of analysts' expectations of 6-7 percent.

EBITDA stood at Rs 4,089 crore, exceeding the CNBC-TV18 poll estimate of Rs 4,003 crore. However, operating margin contracted 140 basis points year-on-year to 22.4 percent. Net profit stood at Rs 2,796 crore, broadly in line with estimates and nearly unchanged from a year earlier. HUL's management said demand remained resilient but cautioned that commodity inflation could persist in the short term. The company maintained its EBITDA margin guidance of 22-24 percent.