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HUL gains for fourth day in a row, brokerages see more upside

The stock has gained 33 percent in the past six months and brokerages believe the rally will continue

September 22, 2022 / 01:06 PM IST
 
 
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The share price of FMCG company Hindustan Unilever extended gains for a fourth straight day on September 22, gaining over 1.5 percent even as benchmark indices the 30-pack Sensex and the broader Nifty declined almost a percent each.

At 12.30 pm, the scrip was quoting Rs 2,670 on the NSE.

Ahead of the festive season, FMCG companies are seeing a rally. They are betting big on the festival season by ramping up supply chains, investing in marketing campaigns and lining up new packs. Managements are also expecting rural demand to make a robust comeback.

A recent report by Bizom says India’s FMCG market increased 6 percent in value in August compared to July, reversing the past three months of consecutive decline.

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Global brokerage firm Nomura expects HUL’s volumes to grow by 4-5 percent in Q2FY23. They have a "buy" rating on the stock with a target price of Rs 2,975.

“We expect the company to benefit from demand uncoiling in out-of-home categories. And, benefits of softening input cost will drive meaningful margin improvement from Q3,” it said.

Macquarie has an "outperform" rating with a target of Rs 3,000. "Our channel checks suggest steady demand. The demand strength should sustain volume growth momentum. Downside risks to margins are limited," its analysts said in a note.

Analysts at Sharekhan like the stock for its leadership position in 80 percent of the portfolio. “Along with that, improving growth outlook and a healthy balance sheet with consistent cash flows makes it a best pick in FMCG space,” according to the brokerage firm. It has a "buy" rating with a target price of Rs 2,850.

Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.​
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first published: Sep 22, 2022 01:06 pm
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