HUL Share Price Falls 4% After Q2 Results: What Investors Should Know
Hindustan Unilever Ltd. (HUL) shares declined as much as nearly 5% during trade after the company posted its second quarter results early Thursday. The Q2 results were significantly impacted by a transitory trade destocking across the supply chain, as distributors held back purchases in anticipation of the Goods and Services Tax rate cuts.
Brokerage Views on HUL
The consensus among top brokerages remains largely positive on Hindustan Unilever Ltd. after the company posted its second quarter results. Names like Cti, Jefferies, and Goldman Sachs have maintained their ‘buy’ ratings, driven by the company’s clear strategic focus on volume growth.
Jefferies leads with the highest target price hike to Rs 3,050, while Citi also raised its price target to Rs 3,000. Despite this, the market is factoring in short-term pain. Investec maintained a Hold with a marginally cut target price of Rs 2,610, and Morgan Stanley maintained an Equal-weight rating with a target of Rs 2,335, citing a slow recovery timeline.
Impact of Q2 Results on HUL Stock
The quarter two results were significantly impacted by a transitory trade destocking across the supply chain, as distributors held back purchases in anticipation of the Goods and Services Tax rate cuts. Management estimated this led to a substantial 200 basis points drag on growth.
Jefferies noted this Q2 impact, which is expected to continue into quarter three, will likely disappoint investors with a short-term orientation. Goldman Sachs, while maintaining Buy, cut its Earnings Per Share estimates to factor in a slower, more gradual recovery pace anticipated for the second half of the financial year.
HUL Stock Performance
HUL stock fell as much as 4.89% during the day to Rs 2,474.5 apiece on the NSE. It was trading 3.66% lower at Rs 2,506.5 apiece, compared to an 0.01% advance in the benchmark Nifty 50 as of 10:04 a.m.
It has risen 0.14% in the last 12 months and 7.82% on a year-to-date basis. The relative strength index was at 56.10.
Analyst Consensus on HUL
Thirty three out of the 44 analysts tracking the company have a ‘buy’ rating on the stock, nine recommend a ‘hold’ and two suggest a ‘sell’, according to Bloomberg data. The 12-month analysts’ consensus target price on the stock is Rs 2,789.6, implying a upside of 11.4%.
For investors looking to invest in the stock market, it’s essential to keep an eye on the Nifty trends and Sensex news. Staying informed about the Indian stock market and Q2 results can help investors make informed decisions.