Target: ₹2,450
CMP: ₹2,305.20
Hindustan Unilever (HUL) posted a 2.8 per cent year-on-year increase in revenue in Q3FY26, with underlying volumes expanding 4 per cent, reflecting broad-based traction across categories. The management indicated that demand trends have gradually improved, supported by moderating inflation, particularly in food, over recent months. The steady improvement in consumer confidence signals an early recovery in overall consumption sentiment.
EBITDA margins contracted to 23 per cent, impacted by decline in gross margins. However, the management expects sequential improvement, supported by a favourable price-cost equation, better product mix and ongoing net productivity initiatives. The management reiterated margin guidance of 22-23 per cent, while continuing to invest in the business to drive sustained growth, with a clear focus on volume-led growth and premiumisation.
HUL remains focused on driving competitive, volume-led growth through stronger brand positioning, expansion in high-growth segments and scaling of future-ready channels such as quick commerce.
The management expects a gradual recovery in the coming quarters, aided by recent GST rate reductions, which could act as a catalyst for demand recovery in the long term, along with other favourable macro policies. However, we remain cautious in the short term and prefer to adopt a wait-and-watch approach and therefore maintain our Hold rating on the stock.
Published on February 13, 2026