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What should investors do with HUL post Q1 results: buy, sell or hold?

The company has reported a net profit at Rs 2,061 crore for the June quarter, up 9.6 percent jump from Rs 1,881 crore in the year-ago period.

July 23, 2021 / 10:41 AM IST
 
 
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Hindustan Unilever (HUL) share price fell in the early trade on July 23 a day after the company reported numbers for the quarter ended June 2021.

On July 22, the company has reported a net profit at Rs 2,061 crore for the June quarter, a 9.6 percent jump from Rs 1,881 crore in the year-ago period.

The FMCG major's revenue was up 12.7 percent at Rs 11,730 crore versus Rs 10,406 crore in the year-ago period.

Its earnings before interest, tax, depreciation and amortization (EBITDA) was up 7.7 percent at Rs 2,847 crore against Rs 2,644 crore and the margin was down at 23.9 percent versus 25 percent, YoY.

Also Read - HUL Q1 results: Net profit up 10% at Rs 2,061 crore, revenue jumps 13% YoY

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Here is what brokerages have to say about the stock and the company post June quarter earnings:

UBS | Rating: Buy | Target: Rs 2,850

The on-the-ground disruption hurts the uplift. The consolidated numbers along with GSK volumes grew 5% YoY, while synergies to materialise by CY21 end.

The Q1 revenue growth was at 12.7% YoY, shade lower than estimates. However, improvement in mobility should aid discretionary/out-of-home portfolio.

Goldman Sachs | Rating: Neutral | Target: Rs 2,182

Goldman Sachs feels that the company is likely to be a beneficiary of the re-open. The 47.8x FY23 EPS and 13% EPS CAGR opportunity is priced in.

Citi | Rating: Buy | Target: Rs 2,710

According to broking house the Q1 was a miss, while maintained buy rating on the stock and cut estimates by 2-6 percent.

CLSA | Rating: Buy | Target: Cuts to Rs 2,850 from Rs 2,900

According to broking house, the near-term margin may be stressed with inflation at a multi-year high.

The Q1 missed the expectations with delayed integration of nutrition business & weak margin. CLSA cut FY22 earnings estimates by 5 percent.

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Prabhudas Lilladher | Rating: Accumulate | Target: Rs 2,535

We are cutting FY22/23 EPS by 4.2%/3.2% and downgrading the stock to accumulate.

Although HUL used to guide for calibrated margin expansion, however inflation in laundry, skin cleansing and Tea inputs and focus on driving volumes is likely to curtail margin expansion to levels lower than earlier expectations.

Sharekhan | Rating: Buy | Target: Rs 2,790

We have reduced our earnings estimates by 3% to factor in lower-than-earlier-expected OPM while we have maintained estimates for FY2023. Strengthening of core brands, creating categories of future through market development, driving premiumisation by straddling product pyramid and focusing on creating bigger brands and better tapping of emerging trends are some key long-term growth strategies.

Motilal Oswal | Rating: Buy | Target: Rs 2,840

The company continues to strengthen the key drivers of its success in India over the last decade.

After premiumization in Detergents led to strong growth in detergent sales and margin in the last decade, the Personal Wash and Dishwashing segments show considerable promise going forward.

At 09:21 hrs Hindustan Unilever was quoting at Rs 2,372.40, down Rs 6.25, or 0.26 percent on the BSE.

The share touched a 52-week high of Rs 2,531.50 and a 52-week low of Rs 2,001 on 22 June, 2021 and 22 September, 2020, respectively.

Currently, it is trading 6.28 percent below its 52-week high and 18.56 percent above its 52-week low.

Disclaimer: The above report is compiled from information available on public platforms. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Moneycontrol News
first published: Jul 23, 2021 10:41 am

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