HUL shares slip despite Q3 beat as analysts await growth pickup

Hindustan Unilever Limited delivered 6% revenue growth in Q3 FY26 with underlying volume growth of 4%, its highest in 12 quarters.
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DANISH SIDDIQUI

Hindustan Unilever Limited shares tumbled 2.44 per cent to ₹2,350.80 on NSE during Friday’s trading session, despite reporting better-than-expected third quarter results the previous day. The stock hit an intraday low of ₹2,343 with sellers dominating at 53.77 per cent against 46.23 per cent buyers.

The FMCG major delivered 6 per cent revenue growth in Q3 FY26 with underlying volume growth of 4 per cent, its highest in 12 quarters. With turnover at ₹16,235 crore and EBITDA at ₹3,788 crore, the company maintained margins within its guided range of 22.5-23.5 per cent. However, reported profit after tax of ₹6,603 crore, up 121 per cent year-on-year, was primarily driven by one-off gains from the ice cream business demerger.

Goldman Sachs maintained its Buy rating but trimmed the target price to ₹2,750 from ₹2,800, noting gradual rather than sharp recovery ahead. The brokerage highlighted HUL’s quick commerce channel growing 100 per cent year-on-year to constitute 3 per cent of sales. HSBC retained at Hold with a ₹2,650 target, cutting FY27 EPS estimates by 4 per cent citing management’s cautious growth guidance of FY27 being merely “better than FY26” without quantifying the improvement.

Jefferies retained Buy with a ₹2,850 target, appreciating the company’s ‘Unified India’ strategy focused on speed and portfolio transformation. However, it expects the stock to remain range-bound until visible growth acceleration materialises. JM Financial maintained Add rating but reduced the target to ₹2,695 from ₹2,770.

Management struck a confident note on demand recovery supported by policy measures but avoided specific growth projections. The company’s commitment to prioritise growth over margins leaves limited scope for margin expansion, making revenue acceleration critical for earnings growth and stock re-rating from current levels.