Hindustan Unilever Stock Update: Should You Buy, Hold, or Sell After Q2 Earnings?

Hindustan Unilever (HUL) shares fell over 3% after its Q2 FY26 results. The company reported a 4% net profit increase, largely due to a one-off tax gain, while revenue grew a modest 2% with flat sales volumes.

Hindustan Unilever Ltd (HUL) shares on Friday (October 24) slipped over 3%, opening at Rs 2,525, making it one of the biggest losers on the Sensex. The fall comes a day after the FMCG giant reported its Q2 FY26 results, showing a 4% rise in net profit to Rs 2,694 crore, boosted largely by a one-off tax gain.

Quarter in Review

Revenue from operations rose modestly by 2% to Rs 16,061 crore, with underlying sales growth also at 2%. Volumes remained flat, reflecting lingering disruptions from the GST transition. EBITDA margins fell 90 basis points to 23.2%, impacted by higher business investments and temporary market pressures.

CEO Priya Nair said the performance was “competitive,” while CFO Ritesh Tiwari reassured investors that margins are expected to remain stable in Q3 as trading conditions normalize by November. Management expects low single-digit price growth in H2 FY26, with hopes for stronger performance in the festive December quarter.

What the Experts Say

Brokerage views are split, leaving investors with mixed signals:

Morgan Stanley: Equal-Weight - Target Rs 2,335

The GST transition trimmed volumes by ~2%, but demand is stable across rural and urban markets. The brokerage expects trading conditions to normalize soon and believes structural initiatives, including the proposed ice-cream demerger, could lift margins.

Goldman Sachs: Buy - Target Rs 2,850

They view Q2 as largely in line, with gradual volume-led growth expected in H2 FY26. CEO Priya Nair’s focus on long-term, volume-driven strategies gives confidence for sustained performance.

CLSA: Underperform - Target Rs 1,966

CLSA highlighted weak growth in personal care volumes despite strong performance in skincare and home care. Price growth remains muted in some segments, signaling a slow recovery.