Hindustan Unilever Targeted at Rs 2454 by Prabhudas Lilladher.

Hindustan Unilever's Profitability Expected to Grow with New Strategies and Acquisitions

In a recent research report, Prabhudas Lilladher has revised its earnings per share (EPS) estimates for Hindustan Unilever (HUL) for the fiscal years 2027 and 2028. The brokerage firm has increased its EPS estimates by 2.0% for FY27 and 2.2% for FY28.

According to the report, the growth in EPS is attributed to several factors, including a strong probability of mid-single digit volume growth in FY27 and FY28. This growth is expected to be driven by gains from the reduction in Goods and Services Tax (GST) and market development. Additionally, HUL is planning to increase prices across its portfolios by 2-5% to neutralize cost pressures, which will further boost sales growth.

The company is also focusing on premiumization across its personal, beauty, and home care categories to sustain margins in a tough economic environment. Despite facing 8-10% raw material (RM) inflation, HUL's lower base in the first half of FY26 is expected to cushion profitable growth.

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The research report also highlights HUL's focus on new channels, premium products, and innovations to drive increased traction across categories. Furthermore, the company is expected to make more acquisitions to fill product gaps, with Minimalist and Oziva scaling up and achieving an annual recurring revenue (ARR) of Rs11bn+.

Based on the report, Prabhudas Lilladher estimates a compound annual growth rate (CAGR) of 8.5% in sales and 9.4% in profit after tax (PAT) over FY26-28. The brokerage firm has assigned a discounted cash flow (DCF) based target price of Rs2454 (Rs2431 earlier). While moderate returns are expected post recent rally, HUL can be accumulated on declines for double-digit returns in FY27.