HUL share price falls 2.5% despite rise in profit, revenue in Oct-Dec quarter; should you buy or sell?

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January 28, 2021 10:34 AM

Hindustan Unilever Ltd (HUL) share price fell as much as 2.5 per cent to Rs 2,330.75 apiece on BSE, after rising nearly a per cent in the opening trade

HUL, bse, nseDespite very good Q3FY21 results, HUL stock hasn't done too well due to a weak sentiment prevailing in the global and Indian markets. Image: Reuters

Hindustan Unilever Ltd (HUL) share price fell as much as 2.5 per cent to Rs 2,330.75 apiece on BSE, after rising nearly a per cent in the opening trade. HUL reported a 19 per cent on-year rise in net profit to Rs 1,921 crore in the October-December quarter. While HUL’s revenue from operations surged 20 per cent on-year to Rs 11,682 crore during the quarter. While on the National Stock Exchange (NSE), the scrip fell 2.42 per cent to Rs 2,333.55 per share. So far in the intraday session, over 3.5 lakh shares were traded on the BSE, while 11.39 lakh shares exchanged hands on NSE, data from the respective stock exchanges showed.

AR Ramachandran, Co-founder & Trainer, Tips2Trade, told Financial Express Online that despite very good Q3FY21 results, HUL stock hasn’t done too well due to a weak sentiment prevailing in the global and Indian markets. “We have been saying for some time that the market was ripe for a sharp correction and we are seeing it right now,” he said. Ramachandran also added that technically, a close below 2300 could lead 2185-2150 which are excellent levels to buy for new investors. While resistance will remain at 2425.

So far in January this year, HUL shares have lost 2.09 per cent. HUL’s Ebitda during the quarter rose 16.6 per cent on-year to Rs 2,804 crore. Analysts at Motilal Oswal Financial Services have given a ‘buy’ rating to the stock with a target price of Rs 2,690 apiece, implying an upside of 13 per cent. With the resumption of growth in the high-margin categories of Discretionary products and Detergents, the analysts said that the EPS growth trajectory going forward is likely to return to a CAGR in the high teens from FY22.

Those at Antique Stock Broking Ltd have also recommended to buy the stock. It has pegged at a target price of Rs 2,629 apiece, the potential return of 10 per cent from the previous close. “We remain positive on HUL’s strong execution capability to drive higher growth vs peers and drive moderate margin expansion on premiumisation and cost-saving initiatives,” the brokerage firm said.

HDFC Securities Institutional Research has maintained a ‘reduce’ rating to it, with a price target of Rs 2,315 apiece. It expects a sustained recovery in the discretionary portfolio along with growth acceleration in the nutrition portfolio.

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