Hindustan Unilever (HUL) share price jumped 1% on Wednesday after the company reported an 11.06 per cent on-year jump in net profit at Rs 2,289 crore compared with Rs 2,061 crore in the same quarter last year. Company’s revenues from operations jumped 19.48 per cent on-year to Rs 14,016 crore. HUL shares were quoting at Rs 2,606, up 1.4% on NSE. So far this year, the stock has outperformed benchmark Nifty, rising around 10%. Most brokerages remain bullish on stock, seeing up to 18% potential rally going forward on the back of rising urban and out-of-home consumption.
Stock talk: Should you buy, hold or sell HUL shares?
Target price: Rs 3,050, Upside: 18%
Analysts at Edelweiss Securities are bullish on HUL stock. While GM will be under pressure in near term, improving portfolio mix, cost control and price hikes should aid EBITDA margin according to the them. The brokerage expects HUL to benefit from rising urban and out-of-home consumption. “Given sharp correction in palm oil prices and some packaging costs, we are raising FY23/FY24E EPS by 3%/6%,” they said. It maintains ‘Buy/SO’ rating on the stock with a revised target price of Rs 3,050. Monsoon is now above-normal, but a huge deficit in high population states (key markets) is a concern, and a key variable to watch out for, it added.
Motilal Oswal: Buy
Target price: Rs 3,000; Upside: 17%
According to Analysts at Motilal Oswal Finance Services, HUL continues to place the building blocks for future growth and has been able to do so ahead of its peers. “HUVR continues to display the dexterity shown over the last decade, despite its larger size, even as it continues to grow v/s peers. While the pace of earnings recovery to double digit and then mid-teens will be gradual, improving narrative will keep multiples high for the bellwether FMCG company,” they said. The brokerage maintains ‘Buy’ call on the stock with a target price of Rs 3,000, implying 17% upside from Tuesday’s close.
ICICI Securities: Add
Target price: Rs 2,750, Upside: 7%
ICICI Securities increased its earnings estimates by ~3%; modelling revenue / EBITDA / PAT CAGR of 12 / 13 / 13 (%) over FY22-24E. Analysts at the brokerage firm turned more positive on HUL in the last quarter citing that most of the concerns around the stock (rural slowdown, inflation woes, D2C premiumisation challenges) were in the price. It maintains ‘Add’ rating on the stock with a DCF-based revised target price of Rs 2,750, up from Rs 2,450 earlier. “Key downside risks are delayed recovery in demand, sustained raw material inflation and irrational competition,” it said.
Yes Securities: Neutral
Target Price: Rs 2,624; Upside: 2.2%
According to analysts at Yes Securities, HUL delivered a better than expected performance driven by 6% volume growth while overall market witnessed mid-single digit volume decline. “While calibrated price hike to c.12% translated to 19% revenue growth, 20% inflation impacted margins adversely. Volume growth has been soft for rural market for three quarters now, but well ahead of industry growth which saw a high single-digit decline,” they said. The brokerage downgraded the stock from ADD to Neutral rating with a revised target price Rs 2,624 based on 50x FY24E earnings.
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