Market sentiment improved significantly as Nifty climbed above 23,900 mark in early trade, with the index advancing 162.25 points or 0.71% to 23,929.70. The S&P BSE Sensex jumped 547.66 points or 0.72% to 76,607.43, while all sectoral indices traded in positive territory. FMCG stocks emerged as top gainers alongside IT and media sectors, indicating positive investor sentiment ahead of Hindustan Unilever's crucial quarterly results announcement. Market breadth remained strong with 2,399 shares rising and 737 shares falling on the BSE, while the NSE's India VIX slipped 3.40% to 13.55, reflecting reduced volatility expectations.
Motilal Oswal has joined the positive chorus on Hindustan Unilever, recommending a 'Buy' rating with a target price of ₹2,500 in its research report dated July 28, 2026. The brokerage firm values the stock at 45x March 2028 estimated EPS, maintaining its bullish stance on the company's strategic initiatives and growth prospects. According to Motilal Oswal's latest report, the company registered consolidated revenue growth of 10% (adjusted for ice-cream demerger) to ₹171.8 billion, which was healthy double-digit growth after 12 quarters of single-digit growth. The brokerage notes that underlying volume growth stood at 5% YoY, partially impacted by softer volumes in Tea and Soaps, while the rest of the portfolio witnessed acceleration in volume growth.
Hindustan Unilever reported mixed Q1 FY27 results that fell short of volume growth expectations but exceeded revenue projections. The company posted consolidated net profit attributable to shareholders of ₹2,680 crore, which was marginally lower than the CNBC-TV18 poll estimate of ₹2,814 crore and represented a 3.17% decline year-on-year from ₹2,768 crore in the previous year. However, net sales grew 10.2% to ₹17,184 crore during the quarter, compared with ₹15,552 crore in the corresponding quarter of the previous financial year, surpassing the CNBC-TV18 poll of ₹17,235 crore and growing 10% year-on-year. EBITDA for the quarter rose 8% to ₹3,947 crore from ₹3,640 crore, while EBITDA margin declined 40 basis points to 23% from 23.4% in the same period last year. The company's profit from continuing operations was ₹2,673 crore, compared with ₹2,741 crore a year earlier, with the decline attributed to the absence of a one-off tax credit in the corresponding quarter. Profit after tax before exceptional items increased 9.3% to ₹2,731 crore from ₹2,498 crore, while the latest quarter included a net exceptional charge of ₹115 crore, compared with ₹125 crore a year earlier. Tax expenses for the quarter nearly doubled to ₹952 crore from ₹526 crore a year earlier, primarily due to a one-off tax credit benefiting the prior year.
HUL delivered a broadly in-line performance in Q1FY27, with revenue growth at 10% being the highest in 13 quarters, driven equally by volume and pricing. According to Prabhudas Lilladher's latest research report dated July 29, 2026, the volume growth of 5% was tad lower than consensus expectation of 6-7%, though the company achieved strong acceleration in revenue growth from 3% in H1FY26. The management attributes this acceleration to deliberate strategic choices – capital concentrated behind under-penetrated 'Power Move' categories, portfolio transformation via bolt-on acquisitions (Minimalist and OZiva) for offline scale-up, and quick-commerce treated as a structural architecture of distribution and pricing rather than a channel addon. The company continues to expect FY27 to be better than FY26 with EBITDA margin in 22.5-23.5% range, driven by its efforts on portfolio transformation, channel expansion, premiumisation and calibrated price hike to offset input cost pressure. As per Mirae Asset Sharekhan's Thomas V. Abraham, the company's Q1 revenue increase of 10% was evenly split between pricing and actual volume gains, with Home Care and Beauty & Wellbeing being the standout performers riding strong demand for premium skin care, hair care, and household products.
HUL's home care business delivered its fastest growth in three years, with the segment reporting topline of ₹6,554 crore and underlying sales growth of 14% compared to the same quarter last year. According to HUL's post-earnings statement, the home care business saw underlying volume growth in the high-single-digits, with disciplined market development and customer-centric innovations enabling the highest growth in three years and strengthening market leadership. Within the home care business, the Fabric Wash division saw double-digit underlying sales growth, aided by underlying volume growth in the higher single digits. Liquids continuing to grow in double digits enabled the bars and powders division to continue their sustained growth trajectory. HUL noted that household care delivered double-digit underlying sales and volume growth with Vim Liquids continuing to scale and focused initiatives seen boosting penetration and delivering strong double-digit growth. The home care business contributed to nearly 39% of Hindustan Unilever's overall topline during the June quarter, making it a key growth driver for the company. The Beauty & Wellbeing segment remained HUL's most profitable, delivering a margin of 28% and 12% underlying sales growth, the highest in at least 10 quarters, with broad-based growth across hair care, skin care and digital-first brands such as Minimalist.
HUL shares declined significantly following the earnings announcement, with the stock falling as much as 7% to hit a 52-week low of ₹2,019 on the BSE during Tuesday's trading session, as reported by The Economic Times. The stock eventually ended at ₹2,023.2, recording the steepest daily fall of 7% since March 2020, according to Bloomberg estimates. The sharp fall reflects concerns over the mounting input cost pressure, which resulted in a 40 basis point year-on-year contraction in the EBITDA margin at 23%. The stock has failed to earn returns over the past five years, falling by over 12% during the period and currently trades at a trailing price-earnings (P/E) multiple of about 32, significantly below the historical three-year, five-year and ten-year average valuations of 52-60. While the management expects FY27 to be better than the previous year in terms of sales and volume growth, sustained input-cost inflation and its impact on future margin expansion is likely to overshadow the earnings beat in the medium term and limit the upside potential of the stock despite cheaper valuation. HUL will continue to take calibrated pricing into the quarter, depending on how inflation pans out, as shaky peace prospects in West Asia continue to keep commodity costs volatile.
Nirmal Bang has maintained its 'Hold' rating on the FMCG major despite raising its target price to ₹2,295 from ₹2,240, implying a potential upside of 13% from current levels. According to NDTV Profit, the brokerage firm remains structurally positive on HUL's long-term growth prospects, supported by premiumisation, portfolio transformation, and continued execution improvements. The brokerage continues to value the stock at 45x Jun-28E EPS, implying a ~18% discount to its 10-year average P/E of 54.9x. This results in a revised target price of ₹2,295 (earlier ₹2,260), offering a potential upside of 13.4% from the current market price. Prabhudas Lilladher has now raised its target price to ₹2,700 with a 'Buy' rating, valuing the stock at 50x FY28e EPS, maintaining its bullish stance on the company's strategic initiatives and growth prospects. JM Financial has upgraded the stock to 'Buy' with a revised target price of ₹2,425, implying nearly 20% upside from current levels, highlighting the resilient margins despite raw material inflation and new management initiatives showing results. Motilal Oswal has also joined the positive chorus with its 'Buy' rating and ₹2,500 target price, noting that the company announced ₹20 billion of capex toward premium and high-growth categories and remains optimistic about delivering better performance in FY27 versus FY26.
