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HUL has declared a total interim dividend of Rs 29 per equity share, with the record date set for November 6
Hindustan Unilever Share Price
Hindustan Unilever (HUL) share price plunged over 5 per cent on Thursday, October 24 after the company’s Q2 results disappointed Street. The scrip fell to a day’s low of Rs 2,533 on the BSE after reporting a 4 per cent decline in its standalone net profit for the quarter ended September 2024, which reached Rs 2,612 crore, compared to Rs 2,717 crore posted in the same period last year.
HUL reported revenue from operations of Rs 15,319 crore, up 2 per cent from Rs 15,027 crore in the corresponding quarter of the previous financial year.
The company has declared a total interim dividend of Rs 29 per equity share, with the record date set for November 6.
HUL’s revenue from operations in Q2FY25 rose marginally by 2 per cent year-on-year (YoY) to Rs 15,319 crore from Rs 15,027 crore. The company reported a volume growth of 3 per cent.
EBITDA for the quarter fell 1.3 per cent to Rs 3,647 crore from Rs 3,694 crore, while the EBITDA margin narrowed by 80 bps YoY to 23.8 per cent.
Moreover, HUL board also decided to separate its ice cream business by December, based on the recommendation of the Independent Committee.
What Should Investors Do?
Despite weakness in overall consumption, brokerage firm Motilal Oswal believes HUL can still see an upward growth trajectory. Rural is still performing well, and HUL has relatively higher saliency from rural, it highlighted.
“We cut our EPS estimates by 2% for FY25 and FY26 each as we moderate our growth assumptions amid raw material cost pressure. HUL’s wide product basket and presence across price segments should help the company achieve a steady growth recovery. Under the new leadership of Mr. Rohit Jawa, HUL is expected to take corrective actions to address the white space, particularly in BPC and F&R. The company commands strong leadership in Home Care, which can be capitalized during improving macros,” MOFSL said.
It reiterated a ‘Buy’ rating on Hindustan Unilever shares with a target price of ₹3,200 apiece, based on 60x Sep’26E EPS, close to the last five-year average P/E.
According to Nuvama Institutional Equities, a gradual rural recovery along with pricing growth coming back in H2FY25E/26E bodes well for HUL’s long-term growth trajectory. Given the urban slowdown, the brokerage marginally cuts FY25E and FY26E EPS estimates. It has a ‘Buy’ call on HUL shares and raised the target price to ₹3,395 from ₹3,375 earlier.
“For HUL, ice cream is a high-growth, high-investment and low-margin business. In Q3FY25, HUL has taken price increases in tea. For FY25, overall pricing growth will be in a low-single-digit. HUL is investing in enhancing the consumer value proposition, which will help to drive the premiumisation trend,” it said.
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