Brokerages split on Hindustan Unilever as urban slowdown clouds outlook

Hindustan Unilever Ltd (HUL), presently priced astatine Rs 2,659, is facing mixed sentiments from brokerages aft its Q2 performance, which highlighted increasing request pressures, particularly successful municipality areas. Here's a curated look astatine the latest views from apical planetary fiscal firms:

Brokerages person offered mixed ratings for Hindustan Unilever Ltd (HUL), presently priced astatine Rs 2,659. JP Morgan has maintained an "Overweight" standing but chopped its people to Rs 2,870 from Rs 2,950, citing slowing municipality demand.

Q2 Performance and Outlook

JP Morgan has maintained its "Overweight" standing connected HUL but revised its people terms down to Rs 2,870 from Rs 2,950. The brokerage cited slowing municipality request arsenic a cardinal interest for the near-term outlook. Though pricing and marketplace stock person improved, the company's gross and EBITDA for the 4th were some astir 1 percent beneath expectations. JP Morgan expects HUL's net per stock (EPS) for FY25-26 to beryllium little by 3 percent owed to these pressures.

Goldman Sachs, connected the different hand, has maintained a "Neutral" stance portion somewhat expanding its people terms to Rs 2,775 from Rs 2,675. This humble revision suggests that the steadfast sees constricted upside imaginable but acknowledges the company's unchangeable fundamentals.

Jefferies remains bullish connected HUL, retaining its "Buy" standing with a people terms of Rs 3,130. The brokerage noted that HUL's measurement maturation (UVG) of 3 percent year-on-year was successful enactment with its estimates but acknowledged the challenges posed by request pressures, peculiarly successful municipality markets. Jefferies pointed retired that the location attraction conception showed beardown gross and EBITDA growth, portion the quality and well-being categories posted humble gains. However, idiosyncratic attraction and foods segments saw a decline.

Morgan Stanley holds a much cautious outlook, maintaining an "Underweight" standing with a people terms of Rs 2,110. The brokerage expressed concerns implicit the anemic header measurement growth, peculiarly successful the idiosyncratic attraction and foods and refreshments (F&R) segments. Morgan Stanley besides indicated that ostentation successful beverage and thenar lipid could pb to debased single-digit terms maturation successful the upcoming quarters.

CLSA has retained its "Underperform" standing connected HUL, with a people of Rs 2,164, portion Macquarie has taken the astir optimistic stance, maintaining an "Outperform" standing and mounting the highest people astatine Rs 3,250. Macquarie believes that contempt the municipality slowdown, HUL's beardown marketplace presumption and strategical initiatives could thrust semipermanent growth.

Key Trends

A communal taxable crossed the brokerage reports is the slowdown successful municipality demand, which is overshadowing a humble betterment successful agrarian markets. This urban-rural disagreement is simply a cardinal origin successful the divergent views connected HUL's maturation potential.
   
Home attraction emerged arsenic a agleam spot successful HUL's Q2 results, with robust growth, portion beauty, idiosyncratic care, and foods underperformed. This segmental variance reflects broader user trends and the interaction of ostentation connected discretionary spending.

With measurement maturation lagging down expectations and inflationary pressures successful cardinal earthy materials similar beverage and thenar oil, HUL whitethorn conflict to thrust important terms maturation successful the adjacent term.

HUL remains a wide covered banal with diverging views from apical planetary brokerages. While firms similar Macquarie and Jefferies spot country for maturation and stay optimistic, others similar Morgan Stanley and CLSA are much acrophobic astir the company's short-term prospects owed to an municipality slowdown and segmental weaknesses. Investors whitethorn request to support a adjacent ticker connected however these dynamics germinate successful the coming quarters.