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HUL gains 11% in two days of posting Q1 results; most brokerages hike TP
HUL Q1 results
HUL reported its Q1FY26 results on Thursday, during market hours. The fast-moving consumer goods (FMCG) giant reported a 5.6 per cent year-on-year (Y-o-Y) rise in its consolidated net profit for the April–June quarter of 2025-26 (Q1FY26) to ₹2,756 crore, topping Bloomberg's consensus estimate of ₹2,608 crore.
The company said part of the year-on-year profit increase was due to a one-time tax gain resulting from a re-estimation of provisions tied to the potential disallowance of certain prior-year expenses.
HUL's profit before interest, depreciation, and tax (PBIDT) declined 4.0 per cent in the quarter under review to ₹3,791 crore.
However, revenue rose 5.1 per cent Y-o-Y, at a seven-quarter high, to ₹16,514 crore, beating the street estimate of ₹16,076 crore. Sequentially, HUL revenue was up 5.4 per cent, and its net profit expanded 11.9 per cent.
How do brokerages view HUL post Q1 results?
Nuvama Institutional Equities has maintained a 'Buy' call but has raised its target price to ₹3,240 per share from ₹3,055 based on a strong growth turnaround. Further, the brokerage believes tea and coffee prices are expected to correct in FY26 primarily due to a strong crop, which will give more firepower to HUL to invest back in the company, ultimately leading to sustainable volume growth.
Emkay Global Financial Services has also continued with 'Add', while increasing the target to ₹2,700 per share from ₹2,400, factoring in better growth and expected improvement in execution under the new leadership. Global brokerage UBS has also maintained 'Buy' and has hiked the target to ₹3,000 from ₹2,800, according to reports. The brokerage believes better-than-expected volume growth portends a better outlook. Additionally, risk-reward is turning "very favourable" for HUL, the brokerage noted.
Under new leadership of CEO Priya Nair, Emkay expects the company to focus on execution, where the focus initially will be to get the team in order and then align the portfolio with evolving consumer needs. Unilever in its H1CY25 results has emphasised on its focus on beauty and wellbeing and personal care; also, it is looking at disproportionate investment in the US and India.
ICICI Securities continued with an 'Add' rating with an unchanged target of ₹2,850 per share. The brokerage reckons that HUL is on the verge of revenue acceleration. Improving macros combined with good (innovation) work on key brands like Glow & Lovely, Lifebuoy, Lux (read micros) and inflection in growth in categories of the future may potentially accelerate revenue growth in FY25-27 and beyond, according to the brokerage.
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