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On expected lines, Hindustan Unilever (HUL) witnessed a decrease in its share price by over one percent on Thursday following the release of its financial report for the quarter ending March 2024. HUL share price declined over 1.7%, attributed to the underwhelming performance reported in its fourth quarterly earnings. In Q4FY24, HUL, a leading FMCG company, disclosed a standalone net profit of ₹2,406 crore, marking a 6% decrease from ₹2,552 crore recorded in the corresponding period of the previous year. The company saw a slight increase in revenue from operations, rising to ₹14,693 crore from ₹14,638 crore year-over-year, driven by a 2% growth in volume.
HUL’s muted Q4 result has made brokerages slash its target price.(REUTERS) Read More: Bank holiday Lok Sabha polls: Banks in these cities will be closed on April 26
HUL's Home Care (HC) segment experienced a 1% year-over-year growth, while the Beauty & Personal Care (BPC) segment witnessed a 2% year-over-year contraction. Additionally, the Foods & Refreshment (F&R) segment achieved a pricing-led growth of 4% year-over-year. Notably, HUL has declared ₹24 per share dividend.
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What brokerages are making of HUL after Q4 numbers
Motilal Oswal expects a gradual volume recovery in FY25 by HUL and that the company’s wide product basket and presence across price segments will aid it in logging steady growth recovery, Live Mint reported. It added that Hindustan Unilever’s volume growth has likely bottomed out.
Motilal Oswal also sees a scope for a turnaround in part of BPC and F&R. It added, “We will monitor the execution in these segments under the new CEO.”
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And as to what investors should do, the brokerage said that, looking at the favorable risk-reward, it will reiterate its ‘Buy’ rating. It revealed HUL target price at ₹2,900, which is based on 55x FY26E EPS.
On its part, Antique Stock Broking expects HUL’s pricing to stay marginally negative and topline to be driven by volume growth in the near term. The recovery in volume growth should be gradual, it added and the reason behind that is that the stress in the rural market is continuing. Among other factors, the brokerage said the termination of GSK consignment can impact margin expansion.The broker has maintained a ‘Hold’ rating, but cut HUL target price to ₹2,455 from the earlier ₹2,566, basing it on 50x PER on FY26E EPS.
JM Financial says that due to muted earnings growth in FY24E, HUL share price has seen a correction. However, with negatives largely known, HUL stock’s very low return over the last 3 years, among other reasons, could likely provide some support on the downside. Keeping all that in mind, the brokerage put a ‘Buy’ call, but cut HUL target price to ₹2,640 from ₹2,970.
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Nuvama Institutional Equities says it has slashed HUL’s earnings per share (EPS) estimates by 7% and 5.5% (FY25 and FY26 respectively). Nuvama reiterated a ‘Buy’ rating, but cut HUL target price to ₹2,885 from ₹3,105.
At 11:52 am, HUL share price was trading 1.77% lower at ₹2220.15 apiece on the National Stock Exchange (NSE).
