Hindustan Unilever shares rise as Nuvama maintains ‘Buy' rating, sees 34% upside on improving margins and TAM expansion
By Aditya Bhagchandani Published on June 25, 2025, 10:38 IST
Shares of Hindustan Unilever Limited (HUL) climbed nearly 1% to ₹2,284.20 on Wednesday, June 25, following a positive note from Nuvama Institutional Equities. The brokerage has maintained its 'Buy' rating on the stock and set a target price of ₹3,055 per share, implying a potential upside of 34% from current levels.
Nuvama highlighted that HUL's sharpened focus on Direct-to-Customer (D2C) channels, Total Addressable Market (TAM) expansion, and affordability initiatives in FY25 are driving the recovery. The company's D2C strategy got a boost after its acquisition of skincare brand Minimalist and ramped-up digital advertising, which now accounts for 40% of its total ad spends.
As part of TAM expansion, HUL recently introduced premium global brands from its parent portfolio, including Liquid IV (a hydration supplement) and Hourglass (a cosmetics line), targeting urban aspirational consumers.
To improve rural and value-market penetration, the FMCG giant launched affordable packs like Rin Liquid at ₹99 and Bru Coffee sachets priced at just ₹2.
According to Nuvama, HUL's Fabric Wash and Household Care segments posted high single-digit volume growth in FY25, and this momentum is expected to continue. Despite elevated palm fatty acid distillate (PFAD) costs, analysts believe easing input prices may support margin improvements going forward.
Additionally, HUL reported a 200-basis point improvement in its product mix towards 'Future Core' and 'Market Makers' segments, aligned with its long-term growth strategy. The company's return on equity (RoE) improved to 20.5%, while return on capital employed (RoCE) rose to 28.7%.
Disclaimer: The information provided is for informational purposes only and should not be considered financial or investment advice. Stock market investments are subject to market risks. Always conduct your own research or consult a financial advisor before making investment decisions. Author or Business Upturn is not liable for any losses arising from the use of this information.
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Aditya Bhagchandani serves as the Senior Editor and Writer at Business Upturn, where he leads coverage across the Business, Finance, Corporate, and Stock Market segments. With a keen eye for detail and a commitment to journalistic integrity, he not only contributes insightful articles but also oversees editorial direction for the reporting team.
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