UBS reiterates Buy rating on Hindustan Unilever stock with favorable outlook

Published 05/07/2025, 08:30
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Investing.com - UBS has reiterated its Buy rating on Hindustan Unilever (NSE:HLL) Ltd (HUVR:IN) with a price target of INR2,800.00, citing an increasingly favorable risk-reward profile for the consumer goods company.

The investment bank expects Hindustan Unilever’s Q1FY26 volume growth to improve sequentially, potentially setting the stage for a meaningful revival in volume growth during the second half of fiscal year 2026. This improvement is anticipated as several base effects become favorable, complementing the company’s portfolio-level initiatives aimed at spurring growth.

While margins in the first half of FY26 are guided to be lower, UBS suggests this picture could potentially reverse in the second half as operating leverage begins to take effect. The firm projects that H2FY26 earnings growth will likely reach double digits, with this momentum expected to continue into FY27.

UBS has mapped four scenarios for Hindustan Unilever’s stock based on different FY27 earnings expectations. In its base case, UBS sees an 18% upside potential for the stock, while its upside case suggests approximately 38% potential gain.

The positive outlook comes as Hindustan Unilever implements various growth initiatives while navigating through temporary margin pressures in the near term.

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