Hindustan Unilever (HUL), a leading FMCG major, faced a setback as its June quarter earnings fell short of Street estimates. The company's shares plummeted over 3%, becoming the top loser in the Nifty FMCG pack. However, analysts have differing views on whether it's the right time to buy.
HUL reported a standalone net profit of Rs 2,472 crore for the June quarter, marking an 8% YoY increase. Yet, this figure missed the projected Rs 2,615 crore, while sales rose by 7% YoY to Rs 14,931 crore.
Let's look at what top brokerages recommend:
Jefferies: Hold | Target: Rs 2,770
Jefferies has revised its rating for HUL to 'Hold' and set a target price of Rs 2,770. The company's weak print saw a volume growth of 3% YoY, hitting a five-quarter low. The outlook is cautious, considering macro headwinds. EPS has been reduced by 1-3% after a 10% rally over the last three months.
Motilal Oswal: Buy | Target: Rs 3,100
Motilal Oswal suggests a 'Buy' with a price target of Rs 3,100. Optimistic about rural recovery and commodity cost reductions, the brokerage believes HUL will return to its mid-to-high teens earnings growth trajectory exhibited before the pandemic.
Nuvama: Buy | Target: Rs 3,280
Nuvama estimates HUL's Q1FY24 revenue in line with its projections but slightly below Street expectations. Despite cutting FY24E/25E EPS by 3%/3%, Nuvama maintains a 'Buy' recommendation with a target price of Rs 3,280, lowered from the previous Rs 3,377.
JM Financial: Buy | Target: Rs 2,980
JM Financial observes that HUL's June quarter earnings were lower than their estimates. Nevertheless, the brokerage sees potential for a double-digit return from the stock in the coming year. However, a tougher operating landscape might cap the valuation-multiple. The target price is set at Rs 2,980.
As an investor, carefully consider these expert opinions and weigh the potential risks and rewards before making a decision on HUL's stock.