Hindustan Unilever (HUL) share value rose 4% in early commerce to hit an intraday excessive of Rs 2,230 apiece on Thursday, a day after the corporate introduced its March quarter earnings. The FMCG main reported a 5.34% enhance in its consolidated internet revenue to Rs 2,307 crore for the fourth quarter. Moreover, HUL has now change into a Rs 50,000 crore turnover firm and likewise the primary pure FMCG agency to attain this milestone. HUL now has 16 manufacturers with a turnover of Rs 1,000 crore every. HUL share value has plunged over 8% thus far this yr. However, brokerages stay bullish and see as much as 17% potential rally going ahead. “HUL is the best prepared among peers, both on the technology front as well as on the e-commerce strategy level, to deal with the potentially significant disruptions going forward,” mentioned Motilal Oswal Financial Services in its report.
Motilal Oswal: Buy
Target value: Rs 2,500
Analysts at Motilal Oswal saved their EPS forecasts for FY23/FY24 broadly unchanged. HUVR’s pre-COVID earnings had been extraordinarily robust and it reported 18% EPS compound annual price within the 4 years ending FY20, earlier than steeper commodity price inflation and the over-indexed discretionary portfolio adversely impacted its earnings in FY21 and FY22. “The company’s pre-COVID earnings growth was particularly impressive given weak mid-single-digit growth posted by its (much smaller) staples peers over the same period. We expect HUVR to return to mid-teens earnings growth,” they mentioned. The brokerage believes that HUL’s valuations at 47.7x FY24E EPS nonetheless depart room for additional upside. “We maintain our buy rating on the stock with a target of Rs 2,500 (premised on 55x FY24 EPS) implying 17% upside,” it mentioned.
Prabhudas Lilladher: Buy
Target value: Rs 2,384
Analysts at Prabhudas Liladher imagine that close to time period margin headwinds are prone to maintain as a result of inflationary atmosphere in commodity basket; down buying and selling of merchandise throughout classes; and rising hole between realisations vs commodity costs. “However, we remain positive on the longer term structural story given sustained market share gains; strong innovation pipeline; scale up in emerging categories; distribution gains from strategies like WIMI and SHIKHAR; and faster growth in premium portfolio. “Risk reward is favourable at 44x FY24 EPS and 2% dividend yield, but we expect returns to be back-ended given near term volume pressures and volatility in input costs. Retain buy,” mentioned Prabhudas Liladher in a report.
Sharekhan: Buy
Target value: Rs 2,456
HUL posted resilient numbers aided by a powerful portfolio of manufacturers throughout value factors serving to it to achieve market share in key classes and throughout markets. “The company is focusing on premiumisation and market development to improve penetration in key categories and digitalisation to drive consistent earnings growth in the medium to long term. We maintain a buy recommendation on the stock with an unchanged price target of Rs 2,456,” the brokerage mentioned in its report.
ICICI Securities: ADD
Target value: Rs 2,450
Analysts at ICICI Securities imagine many of the issues across the HUL inventory (rural slowdown, inflation woes, D2C premiumisation challenges) are actually within the value (60% underperformance vs the Nifty over March 2020-April 2022). According to the brokerage, HUL continues to ship effectively on regular premiumisation and class growth; improve digital capabilities together with e-commerce salience; D2C manufacturers and improved attain (Shikhar) – digital demand seize has 20%+ salience. “As price-lever will have its limitation on guarding margins, the intent is to further drive cost efficiencies. Balance between cost rationalisation and investing for the future will be (again) key. Maintain ADD,” it mentioned.
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Source: www.financialexpress.com”