21% Upside, Buy

3rd August 2026

Price Rp 1755

Target price Rp 2135

Investment Consideration

Higher volumes boost UNVR revenue Growth

• PT Unilever Indonesia Tbk (UNVR) delivered another quarter of positive sales growth in 2Q26, with revenue increasing 11.6% YoY to IDR8.46 trillion. The improvement reflects the continued success of the company’s extensive business reset program, supported by its focus on high-growth categories, social-first demand generation, and go-to-market transformation.
• For 1H26, total sales increased 7.1% YoY to IDR16.89 trillion.
• Unit Volume Growth (UVG) improved significantly to 12.7% YoY in 2Q26, compared with a 4.2% decline in 2Q25. On a 1H26 basis, UVG increased 7.3%, compared with a 6.1% contraction in 1H25. Volume growth was supported by broad-based improvements across UNVR’s key distribution channels. General Trade benefited from continued outlet expansion, while Modern Trade was supported by stronger execution and effective category activation.
• Meanwhile, Unit Price Growth (UPG) declined 1.7% YoY in 2Q26. On a 1H26 basis, UPG remained slightly negative at 0.2%, reflecting the company’s strategy to prioritize volume recovery while maintaining competitive pricing.
• Domestic sales increased 11.0% YoY to IDR8.17 trillion, while export sales grew 33.0% YoY to IDR279.1 billion.
• Following its business portfolio restructuring, UNVR’s market share continued to improve. Value market share increased to 30.8% in 2Q26 from 30.6% in 1Q26, while volume market share rose to 27.0% from 26.3%.
• Looking ahead, we expect both volume and pricing trends to continue improving throughout 2026 as the company’s business reset program gains further traction.

Segment Performance: Home & Personal Care Remains the main Growth Driver

• The Home & Personal Care (HPC) segment remained the company’s strongest growth engine, with revenue increasing 13.1% YoY to IDR6.32 trillion. Growth was supported by 14.2% UVG, compared with a 6.9% decline in the prior-year period, while UPG declined 1.8%.
• Gross margin improved to 45% from 40% in 2Q25, while operating margin expanded to 21% from 18%, reflecting stronger operating efficiency and improved cost management.
• The Food & Refreshment (F&R) segment also delivered encouraging performance, with revenue increasing 7.4% YoY to IDR2.14 trillion. Growth was driven by an 8.7% increase in volume despite a 1.4% decline in pricing.
• Gross margin moderated to 44% from 46% in 2Q25, although operating margin improved to 21% from 19%, supported by disciplined operating cost management.

Q2 2026 Results: Margin Moderates Amid Higher Input Costs

• Core profit from continuing operations increased 4.8% YoY to IDR829.1 billion in 2Q26. On a 1H26 basis, core profit rose 10.2% YoY to IDR2.08 trillion.
• Net profit margin moderated to 9.8%, compared with 12.1% in the corresponding period last year. Nevertheless, 1H26 net profit increased 37.8% YoY to IDR2.97 trillion.
• Cost of sales increased 18.4% YoY to IDR4.65 trillion, mainly reflecting higher palm oil prices and rupiah depreciation. Gross profit nevertheless increased 4.3% YoY to IDR3.80 trillion, although gross margin declined to 45.0% from 48.2% in 2Q25.
• Operating profit declined 7.4% YoY to IDR1.02 trillion, with operating margin easing to 12.1% from 14.6%.
• Advertising and market research expenses declined 4.3% YoY, while promotional expenses increased 5.9% YoY. As a result, the advertising and promotion-to-sales ratio improved to 7.3%, compared with 8.5% in 2Q25, reflecting continued marketing efficiency.

Valuation: Maintain BUY TP IDR 2,135 (+21% Upside)

• We continue to see long-term benefits from UNVR’s transformation strategy and business reset program.
• Supported by improving sales momentum, continued volume recovery, and strengthening market share, we maintain our BUY recommendation with a 12-month target price of IDR2,135, implying 21% upside from the current share price. Our valuation is based on a forward P/E multiple of 23x.