Hindustan Unilever
Broadest lever on the volume recovery
- Last close
- ₹1,863.80
- 29 Sept 2026 · reference
- 1D · 1M
- −1.7% · −7.3%
- price-only
- Weight
- 3.3%
- 31 Jul 2026 · Aug rank 9
- Thesis review
- 8 Sep 2026
- Why We Own, p32
Approved description
India's largest FMCG company (Unilever subsidiary) selling home care (Surf, Rin, Vim), beauty & wellbeing (Dove, Lakme, Ponds), personal care (Lifebuoy, Lux, Closeup) and foods (Horlicks, Kissan, Knorr, Bru) through ~9 million retail outlets. FY26 consolidated revenue was Rs 64,468 cr with 23-24% EBITDA margin; the ice-cream business (Kwality Wall's) was demerged and listed separately on 16-Feb-2026. Market-share leadership in most categories it operates in (company claims ~9 of 10 Indian households use an HUL brand); exact category shares not disclosed in sources used.
- 01Volume inflection: underlying volume growth rose from 2-4% through FY25-H1FY26 to 6% in Q4FY26 and 5% in Q1FY27 with USG of 10%, the best in 13 quarters (HUL Q1FY27 release via Business Standard 28-Jul-2026).
- 02Portfolio reshaped for growth: Home Care +14% and Beauty & Wellbeing +12% USG in Q1FY27; ice cream (low-margin) demerged in Feb-2026; Rs 2,000 cr capex for capacity (ICICI Direct May-2026).
- 03Cash machine: almost debt-free (borrowings Rs 1,478 cr vs equity ~Rs 48,700 cr), 92% dividend payout, FY26 dividend Rs 41/share (Rs 19 interim + Rs 22 final, total payout Rs 9,633 cr), 2.1% yield.
- 04Valuation at the low end of its own range: ~42x FY27E ICICI Direct EPS and 9.5x book vs Nestle India at 73x trailing; consensus targets Rs 2,460-2,800 imply 25-43% upside from Rs 1,960.
- 05Macro tailwinds: GST 2.0 (22-Sep-2025) cut toothpaste, soaps, shampoos and many foods from 18%/12% to 5% (~60% of FMCG basket repriced per NIQ) and ~Rs 1.7 lakh cr/yr of state cash transfers to ~120 mn women support mass-market demand.
Reference close, with results-period markers
- 1Q Sep-25 end · 30 Sept 2025
- 2Q Dec-25 end · 31 Dec 2025
- 3Q Mar-26 end · 31 Mar 2026
- 4Q Jun-26 end · 30 Jun 2026
Quality score, technicals and Buoyant Score
Computing the scorecard…
Latest quarter · Q Jun-26
| Line (₹ cr) | Q Jun-26 | YoY | QoQ |
|---|---|---|---|
| Net Sales | 17,341 | +10.1% | +6.1% |
| Operating Profit | 3,947 | +8.4% | +2.8% |
| Net Profit | 2,673 | −3.0% | −10.7% |
Reported vs internal estimate: internal quarterly estimates are not in the supplied package; consensus feed not licensed. YoY/QoQ per PRD §12.5 (transitions, not %, on non-positive bases).
Position and valuation context
General industrial/consumer/IT preset: growth, margins, ROCE/ROIC, working capital, FCF, net debt; P/E, EV/EBITDA.
Sell-side targets are third-party views, not Buoyant's; the upside is recomputed on our reference close, so it differs from the figure printed at the broker's price date.
Valuation range
No headline target on this page; the book quotes the thesis and the risk rather than a target.
What we watch
- Q2FY27 results (late Oct-2026): first quarter fully lapping GST 2.0 base effects; watch for UVG holding at 5%+ and margin recovery from pricing actions.
- Kwality Wall's open offer by Magnum Ice Cream Co consortium (26% of voting capital) post 16-Feb-2026 listing - completion cleans up HUL's portfolio narrative.
- Festive-season demand (Oct-Nov 2026) supported by state cash transfers and lower GST; interim dividend typically announced with Q2 results.
- Commodity inflation: 8-10% material cost inflation in Q1FY27 (palm oil, crude derivatives) with management expecting 2-5% sequential inflation and only 'calibrated' pricing - EBITDA margin risk to the 22.7% FY27E.
- Personal Care (largest legacy segment) grew only 4% USG in Q1FY27 and is losing share to small/regional players that NIQ shows outgrowing large manufacturers.
- Structural growth ceiling: 5-yr sales CAGR only 6.5% (screener); at 42x forward PE, any slippage back to low-single-digit volumes drives further de-rating (stock already -13% from May-26 levels).