Hndustan Unilever Ltd (HUL) shares fell more than 3% in early trade on Friday, making them one of the top losers on the BSE Sensex, following the company’s Q2 FY26 results.
The FMCG giant reported a 4% year-on-year rise in consolidated net profit to ₹2,694 crore, aided by a one-off tax gain of ₹184 crore. Revenue from operations increased 2% to ₹16,061 crore, with underlying sales growth also at 2% and flat volumes. EBITDA margin slipped 90 basis points to 23.2%, reflecting the temporary impact of the GST transition and higher business investments.
HUL’s stock was trading at ₹2,525, down from ₹2,601.6 at the previous close.
Management Commentary
CEO Priya Nair described the company’s Q2 performance as “competitive” despite transitory disruptions. CFO Ritesh Tiwari added that margins are expected to remain in the current range in Q3, with trading conditions likely returning to normal by November.
The company also guided for stable margins and low single-digit price growth in the second half of FY26, expecting stronger performance in the December quarter.
Brokerage Views
Morgan Stanley issued an Equal-Weight rating with a target price of ₹2,335 per share. The brokerage noted that the GST transition impacted volumes by ~2%, but expects trading conditions to normalize by early November. It expects the second half of FY26 to be stronger than the first, with low single-digit price growth and stable demand across rural and urban markets. Morgan Stanley also highlighted that the ice-cream demerger could add 50–60 basis points to margins.
Goldman Sachs maintained a Buy rating with a target of ₹2,850, noting that Q2 results were largely in line, with volume growth affected by the GST transition. The brokerage expects a gradual growth recovery in the second half of FY26 and emphasized HUL’s focus on volume-led revenue growth under new CEO Priya Nair.
CLSA, meanwhile, assigned an Underperform rating with a target of ₹1,966. It highlighted mixed performance across segments: home care liquids grew, beauty and skincare performed well, personal care volumes declined, and food sales rose 3% with low single-digit volume growth.
HUL’s quarterly performance reflects a company navigating transitional tax impacts, GST adjustments, and portfolio realignment, while maintaining a cautious outlook for gradual growth recovery in the second half of FY26.