21% Upside, Buy

3rd July 2026

Price Rp 1760

Target price Rp 2135

Investment Consideration

Business Reset supports Positive Sales Momentum

• PT Unilever Indonesia Tbk (UNVR) delivered another quarter of positive sales growth in 1Q26, with revenue increasing 2.8% YoY to IDR8.44 trillion. The improvement reflects the continued success of the company’s extensive business reset program, which has supported both volume and pricing performance.
• Unit Price Growth (UPG) increased 1.4% YoY, slightly higher than the 1.3% recorded in 1Q25, reflecting continued pricing stability.   
• Unit Volume Growth (UVG) improved to 2.0% YoY, a significant recovery from the 5.7% decline recorded in 1Q25. The improvement was supported by sustained momentum in both the General Trade and Modern Trade channels, together with strong growth from the Health & Beauty and Digital Commerce businesses.
• Domestic sales increased 3.5% YoY to IDR8.21 trillion, while export sales declined 17.1% YoY to IDR222.7 billion.
• Following the business portfolio restructuring, market share has remained broadly stable. UNVR’s value market share stood at 30.6% in 1Q26, compared with 30.9% in 2H25, while volume market share improved slightly to 26.3% from 26.1%.
• Looking ahead, we expect both volume and pricing improvements to continue throughout 2026 as the company’s business reset program gains further traction.

Segment Performance: Recovery Continues Across Both Business Segments

• Following the completion of the SariWangi Tea divestment in 1Q26, the Food & Refreshment (F&R) segment recorded sales growth of 1.8% YoY to IDR2.39 trillion, supported by a 2.1% increase in volume despite a slight 0.2% decline in pricing. Gross profit margin improved to 47%, although operating profit margin eased to 15%.
• The Home & Personal Care (HPC) segment remained the main growth driver, with revenue increasing 3.3% YoY to IDR6.05 trillion. Growth was supported by UVG of 2.2%, compared with a 9.3% decline in the prior year, while UPG reached 2.0%. Gross margin softened slightly to 49% from 50%, but operating margin improved meaningfully to 27% from 23%, reflecting better operating efficiency.

Q1 2026: margin remains resilient

• Core profit from continuing operations surged 133% YoY and increased 14.1% QoQ to IDR1.25 trillion in 1Q26. Net profit margin improved to 14.8%, compared with 13.4% in the corresponding period last year.
• Cost of sales increased 3.2% YoY to IDR4.37 trillion, mainly reflecting higher palm oil prices and rupiah depreciation. Nevertheless, gross profit still increased 2.4% YoY to IDR4.07 trillion, with gross profit margin remaining broadly stable at 48.2%, compared with 48.4% a year earlier.
• Operating profit rose 9.0% YoY to IDR1.56 trillion, while operating profit margin improved to 18.6% from 17.5%, supported by disciplined SG&A management.
• Advertising and market research expenses declined 29% YoY, while promotional expenses fell 1.9% YoY, reducing the advertising and promotion-to-sales ratio to 10.9%, compared with 13.9% in 1Q25.
• Management expects cost headwinds related to the Middle East geopolitical situation to become more visible during 2H26, mainly through higher commodity and logistics costs.

Valuation: Maintain BUY TP IDR 2,135

• We continue to see long-term benefits from UNVR’s transformation strategy and business reset program.
• Supported by improving sales momentum, volume recovery, and stronger profitability, we maintain our BUY recommendation with a revised 12-month target price of IDR2,135, implying 21% upside and a forward P/E of 23x.