HUL share price slips over 5%; analysts say ‘buy’ post Q4 results, check new target prices

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Published: May 4, 2020 2:45:31 PM

The market share of HUL was up by 50bp in 4QFY20 with 80 per cent of portfolio gaining share in the March quarter, a clear indication of resilient performance in an extraordinarily difficult quarter

HUL share priceThe research and brokerage firm said that coronavirus could revive grocery stores since people have realized how important kirana stores are

Hindustan Unilever (HUL) share price fell as much as 5.47 per cent to hit day’s low of Rs 2075.40 apiece on BSE in Monday’s weak trade. Last week, HUL reported a decline of 3.93 per cent in consolidated profit at Rs 1,512 crore for the quarter ended on March 31, hit by the coronavirus (COVID-19) pandemic. The company had posted a net profit of Rs 1,574 crore in the corresponding period of previous year. Post quarterly earnings, brokerages retained their bullish stance on HUL, with an upside of 23 per cent from an intraday low of Rs 2,075. “We expect HUL to be a key beneficiary of the rural demand recovery. Although COVID-19 related lockdown will affect near-term volumes, we expect volumes and earnings to bounce back once things normalise,” Edelweiss said in its recent research report. The brokerage firm retained its ‘buy’ rating on the stock with a price target of Rs 2,550, an upside of 23 per cent.

The research and brokerage firm further added saying that coronavirus could revive grocery stores since people have realized how important kirana stores are. The company reported a 9 per cent on-year fall in the revenues for the period under review at Rs 9,011 crore.

The market share was up by 50bp in 4QFY20 with 80 per cent of portfolio gaining share in the March quarter, a clear indication of resilient performance in an extraordinarily difficult quarter, says Motilal Oswal in the report. The brokerage firm Motilal Oswal remained positive on the stock and maintained its ‘buy’ rating on the stock with a target price of Rs 2,420, a 16 per cent upside. “The health food drink market is largely focused in the South/East regions; however, even in these regions rural markets are underpenetrated,” Motilal Oswal said.

ICICI Direct maintained its ‘Hold’ recommendation on HUL, with a revised target price of | Rs 2,250 per share, an upside of 8 per cent. The unprecedented turn of events and its negative impact on supply chain and discretionary products demand is expected to result in a revenue decline (comparable) in FY21E, says ICICI Direct in its research report released after fourth-quarter earnings. It also added that essentials (soaps, sanitisers, floor cleaners, personal hygiene products and tea) would continue to witness higher growth in May as facilities would be working with the continuance of labour and supply chain problems.

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