HUL shares fall 3% today after Q2 results, brokerages see gradual recovery; should you buy or sell?

Hindustan Unilever Ltd (HUL) share price fell more than 3 percent in the opening trade on Friday, and were among the top loser on BSE Sensex, a day after the firm's Q2 results. The FMCG major posted a 4 percent year-on-year rise in consolidated net profit for Q2 FY26 to Rs 2,694 crore, but aided by a one-off tax gain. The stock was trading at Rs 2,525, down from Rs 2,601.6 at the previous close.Brokerages have mixed calls ranging from bullish to bearish on HUL stock, saying that while trading conditions will likely normalise after the GST transition, they remain watchful of the gradual growth recovery and volume-led revenue focus. HUL’s management guided for stable margins and a low single-digit price growth in the second half of FY26, with expectations of stronger performance in the December quarter.HUL's quarterly performanceRevenue from operations grew 2 percent year-on-year to Rs 16,061 crore, with underlying sales growth at 2 percent and flat volumes. EBITDA margin slipped 90 basis points to 23.2 percent, reflecting the temporary GST impact and higher business investments. A one-off tax gain of Rs 184 crore aided profit, though earnings before exceptional items fell 4 percent from a year earlier.

• Also read | HUL sees profit margins to hold steady on volume growth, normalising trade

CEO Priya Nair said HUL’s performance was “competitive” despite transitory disruptions, while CFO Ritesh Tiwari said margins should stay in the current range in Q3, with normal trading conditions expected to return in November.Brokerage views on HUL stock

• Morgan Stanley issued an Equal-Weight rating on HUL stock with a target price of Rs 2,335 per share. It said the second half of FY26 is expected to be stronger than the first, with price growth likely to stay in the low single digits. The brokerage noted that the GST transition hit Q2 volumes by around 2 percent, but trading conditions are expected to normalise by early November. It added that gross margin improved sequentially by 135 basis points, offset by higher trade support costs.
• Morgan Stanley expects the trade pipeline to return to the normal 4-6 weeks range over the next few months and said demand remains stable across both rural and urban markets. The brokerage said that the winter and harvest season will be key monitorables and added that the proposed ice-cream demerger could add 50-60 basis points to the company’s margin.
• Goldman Sachs has a Buy call with a target price of Rs 2,850 per share. It said the company’s Q2 results were largely in line, with volume growth impacted by the GST transition. The brokerage expects growth recovery to occur in the second half of FY26, though at a gradual pace. It also said that under the new CEO, Priya Nair, HUL is prioritising volume-led revenue growth going forward.
• CLSA shared an Underperform rating with a target price of Rs 1,966 per share. It said HUL continues to focus on portfolio renovation and volume-led growth. In the home care segment, liquids drove growth, but price growth remained negative. The brokerage noted that the beauty segment performed well, led by strong skincare, while personal care volumes declined. In the foods segment, sales rose 3 percent year-on-year with low single-digit underlying volume growth.

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