HUL vs ITC: Which FMCG major's stock should you buy post Q1 results?

Mint

2 days ago

HUL vs ITC: In times of market volatility, investors often gravitate toward defensive sectors—and in India, the fast-moving consumer goods (FMCG) space is a natural destination. Among its biggest players, ITC and Hindustan Unilever Ltd (HUL) continue to attract investor interest for their stability, consistency, and brand strength.
But with both companies having reported their June quarter (Q1FY26) earnings, which one looks better positioned in the current landscape?
Diversified conglomerate ITC reported a net profit of ₹ 4,912 crore in Q1FY26, broadly flat compared to ₹ 4,874 crore in the same period last year. Its revenue from operations jumped 15 per cent year-on-year (YoY) to ₹ 20,911 crore. EBITDA stood at ₹ 6,261 crore, up 3 per cent YoY, although margins contracted significantly by 530 basis points to 31.7 per cent due to rising commodity prices.
HUL, meanwhile, delivered a 7.6 per cent year-on-year rise in standalone net profit to ₹ 2,732 crore, up from ₹ 2,538 crore in Q1FY25. Its revenue rose 3.8 per cent YoY to ₹ 15,747 crore. However, profit after tax before exceptional items dropped 5 per cent YoY, and EBITDA slightly declined to ₹ 3,718 crore from ₹ 3,744 crore a year earlier. EBITDA margins contracted by 130 basis points to 22.8 per cent, in line with the company's commentary on increased investment in portfolio transformation.
Their performance in the stock market has been diverging, with ITC shares declining 10 per cent over the last one year and HUL shedding just 5 per cent. However, on a year-to-date basis, ITC share price has lost 9 per cent whereas HUL has jumped 9 per cent in the same period.
Om Ghawalkar of Share.Market noted that HUL continues to demonstrate strong price performance, quality metrics, and low volatility. However, he flagged that the stock appears expensive relative to its fundamentals and is supported by only neutral analyst sentiment.
ITC, while weaker in momentum, continues to score high on quality and value. Ghawalkar described the stock as a defensive play with extremely low volatility, but added that bearish sentiment and valuation concerns may weigh on its near-term prospects.
From a valuation standpoint, Harshal Dasani of INVasset pointed out that ITC trades at ~20.4x FY26 estimated earnings per share (EPS), while HUL trades at ~48.5x. He believes ITC offers better earnings resilience at more reasonable valuations, making it a relatively stronger near-term pick post-Q1.
From a technical perspective, too, most analysts prefer ITC over HUL.
Harshal Dasani observed that ITC has rebounded from a key support level around ₹ 420, with improving RSI near 52 and signs of long build-up in derivatives. Meanwhile, HUL is trading below key moving averages, with RSI near 41, suggesting weak momentum, it noted.
Jigar S Patel of Anand Rathi offered a similar view, highlighting a bullish engulfing pattern on ITC's chart near its ₹ 405 support level. He also pointed out a hidden bullish divergence, which could propel the stock toward the ₹ 435–440 range in the near term. In his view, ITC currently shows better technical strength compared to HUL, which appears to be undergoing profit booking at higher levels.
Rajesh Bhosale of Angel One, however, said HUL has shown stronger momentum, climbing from ₹ 2,250 to above ₹ 2,500 and confirming a saucer pattern breakout. He suggests buying on dips in the ₹ 2,400–2,450 zone. ITC, on the other hand, remains range-bound between ₹ 400 and ₹ 430 and lacks a breakout trigger, making it suitable only for range-based strategies.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.