Hindustan Unilever Ltd (HUL) share price tanked 2.1% to Rs 2,467.6 today, despite the company’s fourth quarter financial results meeting analysts’ expectations. The company reported an 8.6% on-year rise in its net profit at Rs 2,561 crore and a 10.5% jump in revenue at Rs 15,215 crore. HUL also approved a final dividend of Rs 22 for the fiscal year ended March 2023 on equity shares of Re 1 per share. HUL stock has fallen over 2% in the past one month while it has gained 15% in the last one year. At the current price of Rs 2469.6 per share, the company’s market capitalisation stands at Rs 5.8 lakh crore. The shares touched a 52-week high of Rs 2,741.6 on 9 December 2022 and a 52-week low of Rs 2,100 on 17 June 2022.
“Looking forward, the near-term operating environment is likely to remain volatile. With inflation easing due to the lapping of high base and sequential softening in a few commodities, price and volume growths will rebalance. Market volumes will recover gradually as consumption habits readjust,” said Sanjiv Mehta, CEO and Managing Director, HUL.
Analysts prefer to avoid HUL shares at the moment
“I would not want to get into an HUL at current levels, because there could be some more correction in the offing. So it is clearly an avoid at the moment and it has been underperforming the FMCG pack for some time,” said Aditya Agarwala of Invest4edu in a TV interview.
“The extent of improvement is below our estimate. We believe the company is passing on the benefit of low commodity prices in terms of price cuts or grammage increases aggressively to perk up volumes. We believe sales of discretionary categories in BPC & malt beverage brands in the foods segment continue to remain under pressure,” said analysts at ICICI Direct Research. The brokerage believes the volume growth for HUL to remain in the mid-single digit with low pricing growth in FY24 and remains cautious on the growth outlook as well as the possibility on margin expansion with high competitive activity.