ICICI Securities has maintained its 'Buy' rating on Hindustan Unilever, setting a target price of Rs 2,700 as the FMCG giant shifts to its new 'Winning in New India' strategy. While the plan focuses on premium products and new markets to drive growth, investors are keeping a close watch on margin pressures and recent profit declines.
Hindustan Unilever (HUL) is resetting its business strategy with a new framework dubbed 'Winning in New India' (WINI). Following this update, ICICI Securities has maintained a 'Buy' rating on the stock, setting a price target of Rs 2,700. The company’s new roadmap aims to capture growth through a specific mix of premium products, market development, and entry into new categories, even as it navigates a challenging economic environment.
The 'Winning in New India' Strategy
The company’s new WINI framework outlines a clear plan for future growth. According to the strategy, HUL aims for 40% of its growth to come from 'premiumization,' which means moving customers toward more expensive, high-value products. Another 40% is expected to come from expanding the overall market, while the remaining 20% will be driven by stepping into entirely new product categories. To support these goals, the company has increased its planned capital spending to 3% of total turnover, up from the previous 2% level, signaling a commitment to expanding its reach and operational capacity.
Financial Performance and Market Reality
The brokerage anticipates an 11% compound annual growth rate for revenue, operating profit, and net profit through the 2028 fiscal year. However, the path ahead involves balancing growth with profitability. In its recent first-quarter results for the 2027 fiscal year, HUL reported a 10% year-on-year increase in total income to Rs 17,341 crore. Despite this rise in income, net profit fell by 3% to Rs 2,673 crore, highlighting that rising operational costs are currently squeezing the company's bottom line.
As of September 7, 2026, the company's shares are trading near Rs 1,967, reflecting investor caution. The brokerage has set an operating margin target of 22-24% for the medium term. Whether the company can maintain this range will depend heavily on its ability to manage input costs.
Risks and Investor Monitorables
While the brokerage is optimistic about the long-term potential, several risks remain. Resurgent costs for raw materials like palm oil and crude oil derivatives continue to threaten profit margins. Additionally, the rapid expansion of quick-commerce channels requires heavy investment in promotions and marketing, which could keep near-term profitability under pressure.
Investors are also tracking the pace of recovery in rural demand. HUL's performance is highly sensitive to agricultural income, and any sluggishness in rural spending could result in weaker volume growth than expected. Geopolitical tensions, particularly in the Middle East, also pose a lingering risk to the company's global supply chain and raw material costs. Moving forward, the most important factors for shareholders to monitor will be the successful execution of the WINI strategy, the stability of profit margins in the face of inflation, and the actual recovery of consumer spending in rural areas.