HUL Shares Fall 5% As Brokerages Turn Cautious After Q2 Results; Should You Buy, Sell Or Hold? | Markets News

HUL Share Price

HUL Share Price: Shares of Hindustan Unilever Ltd (HUL) fell 4.8% in early trade on Friday, October 24, hitting an intraday low of Rs 2,475.20 on the BSE after the FMCG major reported a modest 3.6% year-on-year increase in consolidated net profit for the September quarter. Following the earnings announcement, several brokerage firms turned cautious on the stock, flagging concerns over sustained margin pressures.

Hindustan Unilever’s (HUL) Q2 FY26 performance was modestly positive but largely aided by a one-off tax gain, while operational momentum remained weak amid GST-related disruptions.

The FMCG major reported a consolidated net profit of Rs 2,685 crore for the September quarter, up 3.6% year-on-year from Rs 2,591 crore. The profit increase was primarily driven by a one-time exceptional gain of Rs 273 crore from the resolution of historical tax disputes between UK and Indian authorities. Excluding this gain, core profitability showed limited improvement.

Revenue rose just 0.6% year-on-year, while EBITDA margins contracted 90 basis points to 23%, hurt by GST-led price cuts across a significant portion of HUL’s product portfolio.

Here’s what brokerages said:

Goldman Sachs – Buy | Target: Rs 2,850

Goldman Sachs maintained a Buy rating but trimmed its target to Rs 2,850 (from Rs 2,900), noting a 0.6% revenue rise and a 2.3% drop in EBITDA. Margins stood at 23.1%, slightly below estimates. The firm said GST cuts on 40% of HUL’s portfolio led to price reductions in around 1,200 SKUs, causing short-term destocking. While a Q3 recovery is expected, Goldman Sachs warned it may be slower than earlier anticipated. The brokerage cut FY26–28 EPS estimates by 2–3%, projecting EBITDA margins to stay between 22–23% in H2 FY26.

Nuvama – Buy | Target: Rs 3,240

Nuvama retained its Buy rating and raised the target to Rs 3,240 (from Rs 3,200), expecting margin improvement of 50–60 bps in Q3 post the ice-cream business demerger. It cited a 2% volume hit in Q2 due to the GST transition but expects trade normalisation from November, driving a stronger second half.

Citi – Buy | Target: Rs 3,000

Citi also maintained a Buy rating, raising the target to Rs 3,000 (from Rs 2,900). The firm said HUL’s results were slightly ahead of estimates, with revenue up 2% and EBITDA margin at the higher end of guidance (23%). It attributed Q2 softness to temporary destocking ahead of GST rate changes, with a 200 bps impact, but expects normal trading to resume by early November. Strong demand in home care, skin care, and colour cosmetics offset weakness in tea, hair care, and oral care. Citi projects an 8–9% CAGR in revenue and EPS between FY25–28.

Elara – Accumulate | Target: Rs 2,780

Elara Capital maintained an Accumulate rating with a Rs 2,780 target, remaining cautiously optimistic amid a supportive macro environment and volume-led recovery plans. The brokerage expects GST-related disruptions to continue into October but sees improvement from November. It maintained margin guidance at 22–23%, noting a 90 bps YoY decline to 23% in Q2, still 40 bps above expectations. The upcoming ice-cream business demerger, it said, could add another 50–60 bps to margins in subsequent quarters.

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