Q3 Results Review Hindustan Unilever Ltd and Rate Expectation

Hindustan Unilever is in the FMCG business comprising primarily of Home Care, Beauty & Personal Care and Foods & Refreshment segments. The Company has manufacturing facilities across the country and sells primarily in India. • HUVR’s Q3 UVG/USG (flat/+2% yoy) was 100 bps below our estimate. • We expect earnings to grow by 10.0% in FY26E & grow by 10.6% in FY27E. • Stock is currently trading at valuation of 44.5x P/E FY27E EPS. • We value HUVR using Discounted Cash Flow (DCF) methodology. • We cut FY25-27E EPS by 4-6%, roll over & revise FV to Rs2,635 (from Rs 2850). Q3FY25 Earnings Update: Positives: • The thrust on transformation of beauty & well-being (B&W) portfolio continues. • Gross Margins (GM) contracted 85/35 bps yoy/qoq to 50.7% (KIE: 50.3%). • HUVR acquired Minimalist, a leading active-ingredient-based brand. • New variant of Glow & Lovely (G&L) to be launched in the rural market soon. • Management indicated that rural is gradually recovering. Negatives: • Near-term growth outlook remains soft owing to weak urban consumption.