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HUL shares: Nuvama maintains 'Buy' rating, keeps target price unchanged

HUL shares: Nuvama maintains 'Buy' rating, keeps target price unchanged

HUL: The FMCG giant boosted its D2C presence with the acquisition of skincare brand Minimalist and ramped up digital advertising, which now accounts for 40 per cent of its overall spend.

Prashun Talukdar
Prashun Talukdar
  • Updated Jun 24, 2025 2:57 PM IST
HUL shares: Nuvama maintains 'Buy' rating, keeps target price unchangedHUL shares were last seen trading 0.31 per cent lower at Rs 2,266 on Tuesday.

Hindustan Unilever Ltd (HUL) has strengthened its direct-to-consumer (D2C) play and expanded its digital footprint in FY25, according to Nuvama Institutional Equities, which has reiterated its 'Buy' rating on the stock with an unchanged target price of Rs 3,055.

The FMCG giant boosted its D2C presence with the acquisition of skincare brand Minimalist and ramped up digital advertising, which now accounts for 40 per cent of its overall spend. As part of its strategy to expand its total addressable market (TAM), HUL launched premium global products from its parent portfolio, including hydration supplement Liquid IV and cosmetics brand Hourglass, aimed at the aspirational urban consumer.

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Affordability and accessibility remain key pillars for HUL's growth. The company introduced low-unit price (LUP) packs such as Rin Liquid at Rs 99 and Bru Coffee sachets at Rs 2, which helped deepen penetration in rural and value-sensitive markets. Nuvama noted that HUL has gained penetration in 75 per cent of its portfolio, maintaining category leadership in 85 per cent of its product segments.

Fabric Wash and Household Care segments posted high single-digit volume growth in FY25, with analysts expecting this momentum to continue in the coming quarters. While palm fatty acid distillate (PFAD) costs remained elevated, a potential easing in input prices could support margin improvement ahead.

HUL achieved a 200-basis point improvement in its product mix toward 'Future Core' and 'Market Makers'—strategic segments aimed at long-term growth. Operational metrics also improved, with return on equity (RoE) rising to 20.5 per cent (from 20.2 per cent) and return on capital employed (RoCE) up to 28.7 per cent (from 27.9 per cent).

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For Q1 FY26E, Nuvama projects 3–4 per cent year-on-year (YoY) volume growth, up from 2 per cent in Q4 FY25. HUL's extensive brand portfolio -- over 50 brands across 15 categories -- includes 19 power brands, each generating over Rs 1,000 crore in annual revenue.

Nuvama remains optimistic about HUL's continued focus on innovation, affordability, and digital acceleration to drive sustainable growth.

Meanwhile, HUL shares were last seen trading 0.31 per cent lower at Rs 2,266 on Tuesday.

Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.
Published on: Jun 24, 2025 2:57 PM IST
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