Hindustan Unilever‘s share price fell more than 2% in early trade on Wednesday after the company reported its first-quarter FY25 earnings, which were largely in line with street estimates. HUL shares declined by as much as 2.7%, reaching Rs 2,691.35 apiece on the BSE.
Q1FY25 Performance
Hindustan Unilever (HUL) reported a 3% year-on-year increase in net profit for the quarter ending June 30, 2024, reaching Rs 2,538 crore. This result was in line with Street estimates of Rs 2,541 crore. The company’s revenue from operations rose by 2% to Rs 15,166 crore, compared to Rs 14,931 crore in the same period last year.
The company’s EBITDA for the quarter stood at Rs 3,606 crore, up from Rs 3,521 crore a year ago, reflecting a 2% growth. The EBITDA margin improved to 23.8%, up by 20 basis points from the previous quarter. Total expenses for the quarter increased by 1.5% to Rs 12,116 crore, compared to Rs 11,931 crore in the year-ago period.
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Profit after tax before exceptional items was Rs 2,572 crore, marking a 3% growth. The quarter also included restructuring expenses of Rs 48 crore.
Segment revenue performance
Hindustan Unilever’s revenue from its home care segment for Q1 FY25 reached Rs 5,675 crore, up from Rs 5,425 crore in Q1 FY24. The beauty & wellbeing segment saw a slight increase, with revenue rising to Rs 3,199 crore from Rs 3,103 crore year-on-year.
However, the personal care segment experienced a 4.4% decline in revenue, falling to Rs 2,386 crore from Rs 2,498 crore in the previous year. The foods & refreshment segment reported a rise in revenue to Rs 3,850 crore, compared to Rs 3,797 crore in Q1 FY24.
Brokerages on HUL
Investec on HUL
Investec has maintained a “hold” rating on Hindustan Unilever and increased its target price to Rs 2,797 from Rs 2,439. The brokerage noted that the company’s Q1 performance was marginally ahead of estimates across all parameters.
While there has been a gradual improvement, the UVG (Underlying Volume Growth) was impacted by declines in the personal care (PC) and foods segments. However, premium categories have continued to grow.
Motilal Oswal On HUL
Motilal Oswal has maintained its BUY rating on Hindustan Unilever and set a target price of s 3,250, up from the previous target of Rs 2,797. The brokerage noted no material change in its EPS estimates for FY25 and FY26.
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They expect HUL’s diverse product range and presence across various price segments to support steady growth recovery. Under the new leadership of Mr. Rohit Jawa, HUL is anticipated to address gaps, particularly in the Beauty & Personal Care (BPC) and Foods & Refreshment (F&R) segments.
The company’s strong position in Home Care is expected to be leveraged as macro conditions improve. Motilal Oswal projects a 10% EPS growth for FY25 and 12% for FY26, based on a valuation of 60x June 2026 EPS, aligning with the average P/E ratio of the past five years. Come from Sports betting site VPbet
Emkay Global on HUL
Emkay Global maintains its BUY rating on Hindustan Unilever (HUL) and has raised its target price to Rs 3,100 from Rs 2,900. The firm is optimistic about the company’s prospects under new leadership, which is expected to drive better execution and growth recovery across various segments.
A rebound in rural markets is seen as essential for boosting growth in HUL’s mass-end portfolio, which is currently under pressure. While near-term performance may be subdued, Emkay Global forecasts an 8% sales CAGR from FY24 to FY27 and anticipates a 120bps margin recovery over the next three years.
Report also adds that Q1 results were largely in line with expectations, with a 4% increase in volume growth. The increased target valuation multiple of 58x reflects about a 5% premium to the historical average forward P/E.
HUL Stock Performance in Last One Year
In terms of stock performance, HUL shares have demonstrated positive returns across multiple time frames. Over the past month, the stock has given a commendable 11.44% return, showcasing its stability and growth potential. The last six months have seen even more impressive results, with a substantial increase of 11.43%, indicating a strong upward trend.
Year-to-date, HUL shares have surged by 2.47%, reinforcing the stock’s positive momentum in the current fiscal year. Looking at the broader picture, the stock has delivered an impressive return of over 5.46% in the last twelve months, emphasizing its sustained growth and attractiveness to investors.
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