Shares of a prominent FMCG company surged by 9% to reach an intraday peak of ₹2,723.90 per share following a bullish recommendation from foreign brokerage firm Jefferies, projecting a potential upside of 18%.
Hindustan Unilever is in the FMCG business, comprising primarily of Home Care, Beauty & Personal Care, and Foods & Refreshment segments. The Company has manufacturing facilities across the country and sells primarily in India.
Hindustan Unilever Ltd. belongs to a large-cap category of stock with a market capitalization of ₹6,27,164 crores. On Wednesday, company shares were trading at ₹2,668 per share, up 6.88. percent on the stock exchange.
The company’s shares have seen a 4 percent increase over six months, but experienced a 2 percent decrease over the course of a year.
In terms of revenue, there was a 2 percent year-on-year growth, from ₹60,580 crore in FY22-23 to ₹61,896 crore in FY23-24. Similarly, the net profit rose by 1.4 percent during this period, from ₹10,143 crore to ₹10,282 crore.
International brokerage, Jefferies initiated a ‘buy’ recommendation on Hindustan Unilever Ltd with a target price of ₹2,950 per share, implying an upside potential of up to 18% from Tuesday’s close price of ₹2,496.20. Jefferies upgraded it, citing a surprise outcome in the Lok Sabha 2024 election.
Jefferies anticipates that Hindustan Unilever Limited’s (HUL) recent trend of underperformance compared to the Nifty 50 index over the past three and five years is set to reverse. The brokerage pointed out that HUL has notably lagged behind the Nifty due to significant challenges in growth and margins in recent years.
Additionally, Jefferies expressed confidence in a potential shift in government policy post the Lok Sabha election results, which could be more favorable towards consumption, particularly targeting rural and bottom-of-the-pyramid consumers. The brokerage noted that this shift coincides with indications from some companies suggesting an anticipated uptick in rural consumption, which bodes well for HUL as a market leader.
Looking ahead, Jefferies expects HUL’s growth to improve in the financial year 2025. Consequently, the brokerage has upgraded its earnings per share (EPS) estimates by 1-3%.
Earlier, Motilal Oswal Securities had recommended a buy rating on Hindustan Unilever Ltd, with a target price of ₹2,900 per share.
Written by Omkar Chitnis
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Dailyraven Technologies or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
