Hindustan Unilever’s (HUL) share price dropped over 2% in early trade on Wednesday after the company reported its first-quarter earnings for FY25, which were mostly in line with market expectations. HUL shares fell as much as 2.7% to ₹2,691.35 each on the BSE.
Q1FY25 Results
- Net Profit: HUL reported a net profit of ₹2,538 crore for the June 2024 quarter, a 3% increase from ₹2,472 crore in the same quarter last year.
- Revenue: The company’s revenue from operations grew by 1.3% to ₹15,399 crore, up from ₹15,148 crore year-on-year.
- Volume Growth: Recorded at 4% year-on-year.
- EBITDA: Increased by 2% to ₹3,606 crore, with EBITDA margin rising by 20 basis points to 23.8%.
Brokerages’ Views
Nuvama Institutional Equities
Nuvama stated that HUL’s Q1FY25 earnings met their expectations, with a volume growth of 4%, which was better than their estimate of 3%. They believe HUL will gain market share in personal wash products due to recent changes in the soap segment. Nuvama raised their FY26 earnings per share (EPS) estimates by 2%, maintaining a ‘Buy’ rating and increasing the target price to ₹3,375 from ₹2,885.
Emkay Global
Emkay Global is positive on HUL, expecting better performance under new leadership. They emphasize the importance of rural market recovery for HUL’s growth, especially in its mass-end portfolio. Although they expect near-term performance to be muted, they anticipate gradual improvement with an 8% sales compound annual growth rate (CAGR) from FY24 to FY27. They maintained a ‘Buy’ rating and raised the target price to ₹3,100 from ₹2,900.
Antique Stock Broking
Antique Stock Broking expects HUL’s performance to gradually improve, driven by a recovery in the rural market supported by a good monsoon and government stimulus. They expect minimal expansion in operating margin (40 basis points over FY24–27) due to the company investing in brands to gain market share. They maintained their estimates, expecting HUL to deliver an 8% sales and earnings CAGR from FY24 to FY27, and kept a ‘Hold’ recommendation with a target price of ₹2,574.
Current Trading Status
At 9:30 am, HUL shares were trading 2.39% lower at ₹2,700.40 each on the BSE.
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