Unilever Indonesia stock keeps volume growth despite forecast cuts

BRI Danareksa Sekuritas lowered its earnings outlook for PT Unilever Indonesia Tbk in a research report published on Thursday, November 5, 2026, while retaining a Buy rating. The broker cut its fiscal 2026 to 2028 earnings estimates by 3.4% to 7.2% and set a revised target price of 1,900 Indonesian rupiah.

The report, BRI Danareksa research, said the companys recovery remained driven by volume. Revenue increased 7.4% year on year in the third quarter of 2026, while underlying volume growth reached 6.4%. Revenue for the first nine months rose 7.2%, supported by 7% volume growth.

Recovery Runs Into Cost Inflation

Profitability remains the main constraint on the recovery. Third-quarter gross margin fell to 42.3% as crude palm oil and crude oil prices increased, while logistics costs rose for distribution beyond Indonesias main islands. The pressure led BRI Danareksa to lower its gross-margin assumptions and expect cost inflation to persist beyond fiscal 2026.

Selective price increases provided some protection. Unilever Indonesia implemented two rounds of increases of about 5% in June and August 2026, particularly in home care and skin cleansing products exposed to palm oil and crude oil costs. Average selling prices added 0.9% in the third quarter and 0.2% over the first nine months, according to the report.

Management is also emphasizing premium products. The premium segment grew nearly twice as fast as the non-premium segment and represented 32% of the total market mix in July 2026. Further price increases are planned for the fourth quarter of 2026 and fiscal 2027, while advertising and promotion spending is being redirected toward faster-growing premium categories.

Efficiency Offers A Partial Buffer

Transformation costs reached 57 billion Indonesian rupiah in the third quarter after 170 billion rupiah in the first half. Management now expects a 40% to 50% year-on-year reduction in transformation costs for fiscal 2026, compared with its previous 30% to 40% target. A further reduction is planned for fiscal 2027, subject to the separation of the Foods business.

For investors, the report presents a mixed operating picture: stronger volumes, premiumization and efficiency efforts support the sales recovery, while weaker gross-margin assumptions limit near-term earnings visibility. BRI Danareksa identified weaker consumer purchasing power and volatile input costs as key risks, but maintained its Buy rating and revised target price.

Unilever Indonesia stock traded at 0.08 euros on Lang & Schwarz at 09:44 CET on Tuesday, November 10, 2026.

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Further news and analyses on Unilever Indonesia stock will track the balance between volume growth, pricing and margin recovery.