Hindustan Unilever Share Price Target at Rs 3,000: Motilal Oswal Research
Motilal Oswal Financial Services has issued a BUY recommendation on Hindustan Unilever (HUVR), setting a target price of Rs 3,000, representing a potential upside of 19% from current levels. The report highlights a pivotal leadership transition, a recalibration of growth strategies, and a renewed focus on premiumization and volume expansion. Despite recent margin compression and subdued stock performance, the research house remains optimistic about HUVR’s prospects under its incoming CEO, Priya Nair, citing her proven track record and deep understanding of the Indian consumer landscape.
Motilal Oswal Endorses Hindustan Unilever: BUY Call with Rs 3,000 Target
Motilal Oswal Financial Services has reiterated a BUY rating on Hindustan Unilever, pegging the target price at Rs 3,000. This represents a 19% upside from the current market price of Rs 2,520. The conviction stems from the anticipated positive impact of a leadership overhaul, a strategic pivot towards volume-driven growth, and the company’s robust execution playbook.
Leadership Transition: A Catalyst for Strategic Renewal
Priya Nair, a Unilever veteran with three decades of experience, is set to take the helm as CEO and MD from August 1, 2025. She will be the first woman to lead HUVR, succeeding Rohit Jawa, whose tenure was notably brief at two years. Nair’s appointment is seen as an opportunity to inject fresh impetus into the company’s growth trajectory, leveraging her deep India experience and global exposure.
Her leadership in Home Care and Beauty & Wellbeing segments has been transformative, driving innovation, premiumization, and margin expansion. Under her stewardship, the Home Care business witnessed an 800-900 basis point expansion in EBIT margins and sustained double-digit volume growth.
Strategic Shift: Prioritizing Volume over Margins
HUVR has recalibrated its strategy, shifting focus from margin maximization to volume acceleration. The company revised its EBITDA margin guidance downward to 22-23% (from 23-24%) to accommodate increased marketing and promotional spending. This tactical move is expected to drive gradual volume recovery, even if it temporarily compresses margins.
The new CEO is expected to double down on this volume-centric approach, leveraging her acute understanding of Indian consumers and proven execution skills. The company aims to broaden its customer base, particularly among younger, digitally savvy demographics, and accelerate adoption of direct-to-consumer (D2C) channels.
Track Record of Innovation and Premiumization
Priya Nair’s career is marked by a relentless focus on product innovation and premiumization. She spearheaded the launch of liquid detergents in India, expanded the fabric conditioner market, and introduced category-defining products like Domex Toilet cleaning powder tailored for rural consumers.
Her leadership saw the share of premium products in the laundry segment rise from 17% to 22% between FY11 and FY18. Strategic investments in media and digital channels, coupled with precision marketing, have been instrumental in building strong brand equity and driving consumer upgrades.
Financial Performance Snapshot: Stability Amidst Transition
Despite recent challenges, HUVR remains a financial powerhouse with resilient earnings and robust return ratios. The company reported FY25 sales of Rs 631.2 billion, with a projected growth to Rs 721.5 billion by FY27. EBITDA margins are expected to stabilize around 23.1-23.6% over the next two years, while return on equity (RoE) is forecast to improve from 20.7% in FY25 to 23.6% by FY27.
Here’s a concise snapshot of key financial metrics:
| Metric | FY25 | FY26E | FY27E |
|---|---|---|---|
| Sales (Rs bn) | 631.2 | 671.3 | 721.5 |
| EBITDA (Rs bn) | 148.5 | 155.2 | 170.0 |
| Adj. PAT (Rs bn) | 104.2 | 109.6 | 121.0 |
| EPS (Rs) | 44.3 | 46.6 | 51.5 |
| RoE (%) | 20.7 | 21.9 | 23.6 |
| P/E (x) | 56.8 | 54.0 | 48.9 |
Stock Levels and Investor Guidance
Current Market Price: Rs 2,520
Target Price: Rs 3,000
Upside Potential: 19%
Key Support Level: Rs 2,136 (52-week low)
Key Resistance Level: Rs 3,023 (52-week high)
Motilal Oswal’s BUY call is underpinned by the expectation that HUVR’s renewed focus on volume growth, premiumization, and digital transformation will drive sustainable long-term value for shareholders. The stock is trading at a forward P/E of 54x FY26E EPS, which, while elevated, is justified by the company’s dominant market position, innovation pipeline, and robust return ratios.
Risks and Considerations
Execution risk remains a key concern, especially given the rapid evolution of India’s consumer landscape and intensifying competition. The company’s ability to successfully implement its volume-led strategy, maintain brand relevance, and navigate margin pressures will be critical.
Investors should monitor the pace of volume recovery, effectiveness of new product launches, and the impact of increased marketing spends on profitability. Any deviation from the projected volume uptick or sustained margin compression could temper the bullish outlook.
Poised for a New Growth Chapter
Hindustan Unilever stands at the cusp of a strategic inflection point. The incoming CEO’s blend of local expertise and global perspective, coupled with the company’s renewed growth strategy, positions HUVR to reclaim its leadership in the Indian consumer sector. Motilal Oswal’s BUY recommendation, with a target price of Rs 3,000, accentuates the stock’s potential as a compelling long-term investment for discerning investors seeking both stability and growth in their portfolios.
