Nuvama Reiterates 'Buy' Rating on Hindustan Unilever Shares, Sees 40% Upside Potential

The shares of Hindustan Unilever are in the spotlight. It is also one of the most tracked consumer goods companies in India. The brokerage Nuvama has reiterated its ‘Buy’ rating on the stock and maintained a target price of Rs 3,090, implying an upside potential of around 40% from current levels. According to the Nuvama , growth trends at Hindustan Unilever (HUL) have improved steadily over the past few quarters. This is supported by premium product launches, rapid expansion in digital channels and the growing contribution of its direct-to-consumer (D2C) brands. Let’s take a look at the key reasons why the brokerage house is bullish on this stock – One of the key reasons behind Nuvama’s positive stance is the gradual acceleration in HUL’s revenue growth. Nuvama report noted that the revenue growth improved from 3% year-on-year in the first half of FY26 to 5.7% year-on-year in the third quarter, before reaching 7.6% year-on-year in the fourth quarter, the highest level seen in the last 12 quarters. Nuvama said, “We expect Q1FY27 to be strong with 9–10% YoY sales growth and volume growth of 6–7%.” The brokerage also expects HUL’s pricing growth ro be around 2-3%. As per the Nuvama report, HUL is increasingly focusing on premium categories to drive future growth. Over the past year, the company introduced several new products across beauty, wellness, nutrition and personal care categories. These include Dove’s Peptide range, Horlicks Protein Shake, Horlicks Pro Fitness, Closeup White Now and Lipton Metabolism Boost Effervescent Tablets. Nuvama believes premiumisation remains one of the most important growth levers for the company. Another important theme emerging within HUL’s business is the rapid growth of its D2C portfolio. Nuvama noted, “OZiva also scaled nearly 4x over the last three years.” The report further stated, “Minimalist grew in double-digit in the year of acquisition.” The brokerage believes these brands are helping HUL strengthen its presence in fast-growing consumer segments such as health, wellness and premium skincare. Consumer buying habits are changing rapidly, and HUL appears to be benefiting from this shift. During FY26, the online channels continued to grow strongly during FY26. Nuvama added “E-commerce revenue grew 25% YoY while quick commerce sales doubled in FY26.” The report also noted that modern trade channels continued to expand. HUL’s Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA) margin stood at 23.6% in FY26. The brokerage noted, “EBITDA margin declined ~67bp YoY to 23.6% (at the upper end of guidance).” At the same time, return ratios improved. Return on Equity (RoE) rose to 22.1% in FY26 from 20.5% a year earlier, while Return on Capital Employed (RoCE) increased to 29.3%. HUL’s future growth will largely depend on the success of its premiumisation strategy. However, the report also highlighted one important risk. Nuvama cautioned that “ El Nino remains a risk for rural consumption”, which could affect demand trends in the second half of the year if weather conditions turn unfavourable.