Unilever Indonesia stock faces cost pressure after estimate cuts

Published on 11/09/2026 at 15:28 | Editorial responsibility: Rafael Müller, Editor-in-Chief AD HOC NEWS

Unilever Indonesia stock is recovering through stronger volumes and selective price increases despite higher commodity and logistics costs. BRI Danareksa cut its outlook.

Recovery Meets Cost Pressure

BRI Danareksa reduced its earnings outlook while retaining a Buy rating and a lower IDR 1,900 target price.
Unilever Indonesia reported continued volume-led growth, but commodity and logistics inflation compressed the third-quarter gross margin.
Further selective price increases and lower transformation costs are central to the company's 2026 and 2027 plans.

Unilever Indo, ID1000095706, Illustration mit AI erstellt.

Unilever Indonesia is showing stronger operating momentum, but rising input costs are making the recovery harder to convert into earnings. In an equity research report published on Thursday, November 5, BRI Danareksa Sekuritas retained its Buy rating while reducing its fiscal 2026-28 earnings estimates by 3.4% to 7.2% and lowering its target price to IDR 1,900. The BRI Danareksa report linked the change to weaker gross-margin assumptions and persistent cost inflation.

Volume Growth Faces Margin Pressure

Third-quarter revenue rose 7.4% year on year, with underlying volume growth contributing 6.4% and selective price increases adding 0.9% to average selling prices. For the first nine months of 2026, volume growth reached 7% and revenue increased 7.2%.

The operating recovery is broad, but profitability remains exposed to crude palm oil, crude oil and logistics costs, particularly for distribution beyond Indonesia's main islands. Third-quarter gross margin fell to 42.3%, according to the research report.

Unilever Indonesia introduced selective price increases of about 5% in June and August 2026, focusing on home care and skin-cleansing products with greater exposure to palm oil and energy costs. Further increases are planned for the fourth quarter and fiscal 2027, while management continues to prioritize premium products and market share.

Efficiency Offers Partial Support

Transformation costs were IDR 57 billion in the third quarter after IDR 170 billion in the first half. Management now targets a 40% to 50% year-on-year reduction in transformation costs for fiscal 2026, compared with its previous 30% to 40% forecast, followed by another decline in fiscal 2027 subject to the separation of the Foods business.

The company's third-quarter release, published on October 22, said continuing-operations net profit increased 10.6% in the first nine months despite inflationary pressure. It also described a fifth consecutive quarter of volume-led growth and management's focus on modest margin improvement in 2026.

Unilever Indonesia stock traded at 0.08 euros on Lang & Schwarz at 15:19 CET on Monday, November 9, 2026.