Hindustan Unilever WINI reset targets volume-led growth across new consumer segments

Investment View and Valuation

In its September 6, 2026 analyst-meet update, Motilal Oswal Financial Services reiterated its Buy recommendation on Hindustan Unilever (HUL), with a target price of Rs 2,400 based on 40x September 2028E EPS. The broker believes HUL's renewed strategy can address the growth challenges of recent years as the business resets towards volume growth and market development. Sequential improvement in underlying sales growth and market-share gains provide early validation, according to the broker.

Winning in New India Strategy

Management presented its Winning in New India (WINI) strategy, which is intended to address rapidly changing consumer preferences, particularly among younger consumers. HUL reported FY26 turnover of Rs 638 billion, with 21 brands exceeding Rs 10 billion in revenue. More than 90 per cent of turnover comes from categories where HUL is number one. The company sells more than 85 billion packs annually through over 9 million outlets, and its brands are used by nine out of 10 Indian households.

However, turnover was broadly flat between FY24 and FY26 excluding Ice Cream, providing the rationale for the strategic reset.

Five Reset Actions

• SASSY brand transformation: Science, Aesthetics, Sensorials, Said by Others and Youthful.
• Sharper resource allocation behind fewer and bigger bets.
• Acceleration in selected growth pockets.
• A dedicated Quick Commerce organisation.
• A unified India operating model.

HUL is managing India as distinct growth cells across large cities, small towns and Tier 4/rural markets. Consumers are segmented as Power Spenders, Premiumizers and Democratizers. Management noted that small towns are growing at twice the all-India rate, while around 70 per cent of Indians live in Tier 4/rural markets.

Premiumisation and Market Creation

Premiumisation and market creation are important growth levers for HUL. Beauty & Wellbeing generated FY26 revenue of Rs 149.9 billion, representing 23 per cent of HUL revenue, at a 28 per cent segment EBIT margin. The portfolio has expanded through Paula's Choice, K18, Dermalogica, Nexxus, Minimalist, Liquid I.V., OZiva and Simple. Minimalist exceeded Rs 9 billion in annual recurring revenue and has doubled since acquisition.

In Home Care, liquid-format migration offers potential: liquids account for only 5 per cent of laundry volumes, compared with 63 per cent for powders and 32 per cent for bars. HUL is also repositioning Horlicks as a lifestyle-nutrition platform and expanding Foods into protein, premium beverages and cold-drink occasions.

Growth Investment and Margin Outlook

Management expects FY27 performance to be better than FY26 and prioritises competitive, volume-led revenue growth over near-term margin expansion. It indicated a medium-term EBITDA margin range of 22-24 per cent, compared with earlier guidance of 22.5-23.5 per cent.

HUL expects to generate cumulative fuel for growth equivalent to 500 basis points of sales over five years from premiumisation, operating leverage, the Future Savings Lab and AI-led media effectiveness. The company intends to reinvest the entire amount in products, packaging, media, sampling, pricing architecture and channels.

Capex intensity is expected to rise from around 2 per cent historically to around 3 per cent of turnover, with over 85 per cent directed to growth and savings initiatives.

Financial Estimates

Motilal Oswal estimates revenue of Rs 706.2 billion in FY27E, Rs 766.4 billion in FY28E and Rs 831.7 billion in FY29E, implying a 9 per cent revenue CAGR over FY26-29.

Headwinds and Mitigants

Relevant headwinds cited in the report include rising crude prices and macro volatility. Management believes commodity hedges, faster cost savings, portfolio transformation and stronger omnichannel capabilities can help HUL navigate these pressures.