Why Are Brokerages Divided on Hindustan Unilever After Q2 FY26 Results?
Hindustan Unilever Limited (HUL) continues to attract mixed opinions from global and domestic brokerages after its second-quarter FY26 earnings. While consumption trends remain soft due to the Goods and Services Tax (GST) transition impact, brokerages foresee steady recovery in the second half as the company leans on premiumisation and new category expansion.
How Do the Latest Brokerage Targets Compare?
| Brokerage | Rating | Target Price (₹) | Key Highlights |
|---|---|---|---|
| Macquarie | Outperform | 3,000 | Premiumisation to drive 2H growth; Ice-cream demerger adds 50–60 bps margin |
| Morgan Stanley | Equal-Weight | 2,335 | Margins +135 bps QoQ; stable demand; GST drag in Q2 |
| Goldman Sachs | Buy | 2,850 | 2Q in-line; CEO focusing on volume-led recovery |
| CLSA | Underperform | 1,966 | Home care liquids strong; foods up 3 % YoY; portfolio renovation underway |
| Jefferies | Buy | 3,050 ↑ | Medium-term strategy solid; Q2 hit by GST; ice-cream listing due Q4 |
| Elara Capital | Accumulate | 2,780 | Rural recovery key; FY26 EBITDA 23 % |
| Investec | Hold | 2,610 ↓ | Soft momentum; resilient margins |
Layman’s explanation: The wide range in target prices—₹1,966 to ₹3,050—shows uncertainty about near-term demand. Analysts agree that margins remain firm, but rural recovery and GST-led destocking will decide whether HUL sustains its leadership in FY26.
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Understanding the Ice-Cream Demerger Impact
Nearly every brokerage highlights the planned demerger of HUL’s ice-cream division. Once separated, analysts expect an immediate uplift of about 50–60 basis points to group operating margins. The move lets management focus on scaling the premium dessert brand while unlocking shareholder value through sharper category targeting.
Technical Terms Simplified
- Basis Point (bps): One-hundredth of a percent (0.01 %). Thus, 60 bps = 0.6 % increase in margin.
- Premiumisation: Strategy of encouraging consumers to upgrade to higher-margin, better-quality products.
- Equal-Weight (EW) / Underperform (U-P): Analyst ratings—EW implies neutral stance; U-P means expected to lag index peers.
Brokerages anticipate sequential growth recovery in the December quarter as festive demand meets easing GST disruptions. Pricing actions remain limited, so real growth will depend on higher volumes and new launches in beauty and foods.
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Investor Takeaway
Indian-Share-Tips.com Nifty Expert Gulshan Khera, CFP®, who is also a SEBI Regd Investment Adviser, notes that despite GST-related hiccups, HUL retains a strong moat in personal and home-care categories. Investors seeking steady compounding should view dips near ₹2,400–₹2,450 as accumulation zones, with a long-term perspective on brand strength and cash flow consistency. Discover more analytical perspectives at Indian-Share-Tips.com, which is a SEBI Registered Advisory Services.
Related Queries on HUL Brokerage Outlook
- Which Brokerages Are Bullish on HUL After Q2 FY26?
- How Does the Ice-Cream Demerger Affect HUL Margins?
- Why Do Target Prices Differ Widely Among Analysts?
- Is Premiumisation the Key Growth Driver for HUL?
SEBI Disclaimer: The information provided in this post is for informational purposes only and should not be construed as investment advice. Readers must perform their own due diligence and consult a registered investment advisor before making any investment decisions. The views expressed are general in nature and may not suit individual investment objectives or financial situations.
