HUL shares declined 0.55% to ₹1,962.5 in morning trade on Monday, following the company's Capital Markets Day announcements. The stock movement came amid a softer broader market, with the Nifty 50 down 0.28% at 23,831 and the Sensex declining 199 points to 76,316 at 9:34 am. The FMCG major's market capitalisation stands at just under ₹4.64 lakh crore, while the stock has fallen around 15% so far in 2026, substantially underperforming the Nifty 50, which is down 8.6% over the same period. The latest price movement reflects continued investor uncertainty about the company's near-term growth prospects despite its strong market position.
At HUL's analyst meet, management presented its 'Winning in New India' (WINI) strategy, positioning the portfolio to address fast changing consumer preferences, particularly among the youth. The company clocked a turnover of ₹638 billion in FY26, with 21 brands surpassing the ₹10 billion mark. Over 90% of the turnover originated from categories where it holds the #1 position, while more than 85 billion packs are sold annually and reach 9 million+ outlets. One or more HUL brands are used by 9 out of 10 Indian households. The management highlighted that its strategy of volume growth entails a focus on winning in 'New India' (rising incomes, digital penetration and changing consumer preferences) as against the previous strategy of winning in 'Many Indias' (geographic/regional categorisation). About 80% of the growth is expected to come from consumption, premiumisation and expansion of the base, while the rest is expected to come from entry into high-growth markets. The company is undergoing five reset actions comprising SASSY (scientific, aesthesis, sensorial, said by others, youthful) brand transformation framework, sharper resource allocation behind fewer bigger bets, acceleration of selected growth pockets, a dedicated Quick Commerce organization, and a unified India operating model. While turnover doubled and EBITDA surged 3x between FY14 and FY24, turnover was broadly flat between FY24 and FY26, providing the backdrop for the current reset.
HUL reported a 3% year-on-year decline in consolidated net profit to ₹2,673 crore for the quarter ended June 30, 2026 (Q1 FY27), compared with ₹2,756 crore recorded in the corresponding quarter of the previous fiscal year. As reported by Live Mint, the decline came despite a one-off tax credit recognised during the quarter. The company's total income rose 10% YoY to ₹17,341 crore in Q1 FY27, from ₹15,757 crore in the same period last year. At the operating level, EBITDA increased to ₹3,947 crore in the June quarter from ₹3,640 crore in Q1 FY6, though the EBITDA margin narrowed to 22.76% from 23.1% a year earlier. The latest data shows standalone net sales at ₹16,657 crore, up 4.56% YoY, while consolidated net sales reached ₹17,341 crore, up 5.01% YoY for June 2026. According to PL Capital, underlying sales growth rose to 10% in Q1 FY27, from 7% in Q4 FY6 and 5% in Q3 FY6, compared with 3% in the first half of FY6. The management remains confident about delivering better growth in FY27 versus the past three years, with excluding ice creams, turnover has been broadly flat between FY24 and FY26. HUL navigated market volatility through strict financial discipline, delivering an EBITDA margin of 23%, well within its guided range, with absolute EBITDA growing 8% year-on-year to ₹3,947 crore and profit after tax (before exceptional items) rising 9% year-on-year to ₹2,731 crore.
HUL has widened its medium-term EBITDA margin guidance to 22-24% from 22.5%-23.5% earlier, aided by better product mix as it shapes the portfolio structurally toward higher-margin products. The company expects growth in the gross-margin-accretive portfolio at 1.5x the rest of the portfolio. To support growth and productivity, HUL plans to increase capital expenditure with capex intensity expected to rise to about 3% of sales from around 2% historically, with more than 85% directed towards growth and savings initiatives, compared with 75% earlier. The company's CEO Priya Nair's strategy focuses on driving 40% of growth through increased consumption by encouraging higher usage and premiumisation with more benefits, 40% through market-making by bringing in more users, and the remaining 20% by shifting the portfolio towards high-growth new white spaces and formats. HUL is targeting 500 basis points of savings through premiumisation, operating leverage, the Future Savings Lab and AI, with capex expected to rise to 3% of sales, with more than 85% directed towards growth and savings. JM Financial points out that as HUL pivots towards a high-gross-margin portfolio (which will grow 1.5 times the balance portfolio), it sees scope to deliver higher margins and has hence raised the upper end of margin guidance to 24% (from 23.5%); but the portfolio reset will also entail higher investments at times, leading to a cut in the lower end of the guidance to 22% (from 22.5%).
While HUL trades at a discount to its historical valuation multiples, it continues to command a significant premium over the indices in which it sits. The decline in the PE from a median of 54.5 over five years to 42 at present shows investors are assigning lower valuation multiples to HUL stock compared to its history, making it appear undervalued based on historical metrics. However, HUL trades at PE of 42, a substantial premium to the BSE FMCG Index's 32, and more than twice the Sensex or Nifty's PE of around 20, reflecting its strong brands, distribution and earnings stability. Despite cost pressures, HUL continued to invest in its brands, increasing advertising and promotion spends sequentially to ₹1,657 crore, the highest in 11 quarters, while strengthening its omni-channel execution. The company's supply-chain resilience proved critical during volatility, ensuring uninterrupted supply through its global procurement network. With 50 brands in 15 categories across the price-benefit pyramid, HUL is uniquely positioned to serve diverse consumer needs. Brokerages were largely positive following HUL's Capital Markets Day, with Jefferies, Nomura and HSBC retaining their 'buy' calls on the stock. Their target prices of ₹2,440-2,450 imply roughly 24-25% upside from Friday's closing price. Morgan Stanley remained 'equal-weight' with a target of ₹2,480, while CLSA was the most cautious, retaining a 'hold' rating and a target price of ₹1,804. Motilal Oswal has now joined the positive chorus, recommending a 'buy' rating with a target price of ₹2,400 based on 40x on Sep'28E EPS. However, analysts led by Vivek Maheshwari of Jefferies Research point out that HUL's playbook for 'New India' is shifting from broader reach to sharper, segment-led growth, though they have cut earnings estimates by 1-2% to factor in the risk of lower near-term margins due to the high input price trend and lowered their valuation multiple to 45 times September 2028 earnings estimates.
