HUL share price falls after muted Q4 results; brokerages cut target price; Should you buy, sell or hold the stock?

FMCG large Hindustan Unilever (HUL) reported a standalone nett net of ₹2,406 crore successful Q4FY24, registering a diminution of 6% from ₹2,552 crore successful the aforesaid play past year. 

The company’s gross from operations roseate marginally to ₹14,693 crore from 14,638 crore, YoY, with 2% measurement growth.

HUL’s Home Care (HC) conception grew 1% YoY, whereas the Beauty & Personal Care (BPC) conception contracted 2% YoY and Foods & refreshment (F&R) delivered pricing-led maturation of 4% YoY. 

Read here: Is depletion request recovering? HUL bosses deliberation so

At the operating level, EBITDA declined 1% YoY to ₹3,435 crore, portion the EBITDA borderline contracted 20 bps to 23.1%. 

The FMCG large besides declared a dividend of ₹24 per share.

In the modulation signifier of the past 12 months, HUL’s measurement maturation was anemic and worth maturation was affected by terms cuts. Analysts expect a gradual betterment successful measurement maturation successful FY25, driven by ain initiatives and gradual betterment successful demand.

Here’s what brokerages said connected HUL Q4 results and HUL stock price:

Motilal Oswal

Motilal Oswal believes that Hindustan Unilever’s measurement maturation has bottomed retired and expects a gradual measurement betterment successful FY25. HUL’s wide merchandise handbasket and beingness crossed terms segments should assistance the institution execute a dependable maturation recovery. 

There is scope for a turnaround successful portion of BPC and F&R; we volition show the execution successful these segments nether the caller CEO. The valuation astatine <45x FY26E EPS is tenable fixed its past five-year mean P/E of 60x connected one-year guardant earnings, Motilal Oswal said.

Considering favorable risk-reward, the brokerage steadfast reiterated its ‘Buy’ standing connected HUL with a people terms of ₹2,900 per share, based connected 55x FY26E EPS.

Also Read: Kotak Mahindra Bank stock terms tanks 10% arsenic RBI enactment seen hurting growth, margins

Antique Stock Broking

Antique Stock Broking believes pricing is apt to stay marginally antagonistic and topline to beryllium driven by measurement maturation successful the adjacent term. The brokerage is of the presumption that the betterment successful measurement maturation should beryllium gradual arsenic the accent successful the agrarian marketplace continues. Additionally, higher A&P spends, summation successful royalty payment, and termination of GSK consignment tin restrict borderline enlargement successful FY25. 

Post the HUL Q4 results, the brokerage cuts estimates by 3% – 4% implicit FY25 – FY26. It maintained a ‘Hold’ standing and chopped HUL stock terms people to ₹2,455 apiece from ₹2,566 earlier, based connected 50x PER connected FY26E EPS.

Also Read: Axis Bank stock terms rises 5% buoyed by steadfast Q4 numbers

JM Financial

JM Financial believes with lack of pricing lever (guidance of debased azygous digit diminution successful 1H & debased azygous digit maturation implicit 2HFY25E) and competitory strength sustaining, borderline enlargement is unlikely. 

HUL stock terms has seen crisp correction, relation of muted net maturation successful FY24E. With negatives mostly known, stock’s precise debased instrumentality implicit the past 3 years and valuation beneath humanities mean could apt supply immoderate enactment connected the downside, JM Financial said.

Given the pugnacious operating landscape, rerating volition beryllium contingent connected amended visibility connected measurement acceleration & double-digit net growth, it said.

JM Financial maintained a ‘Buy’ telephone connected HUL shares and chopped HUL people terms to ₹2,640 per stock from ₹2,970 earlier.

Nuvama Institutional Equities

HUL posted an wide in-line Q4FY24 versus Nuvama’s estimates with gross maturation of 0.4% YoY, whereas EBITDA and adjusted PAT edged down 1% and 2% YoY.

Nuvama Institutional Equities chopped its  FY25 and FY26 net per stock (EPS) estimates by 7% and 5.5%. It maintained its ‘Buy’ standing and chopped HUL stock terms people to ₹2,885 from ₹3,105 earlier.

At 10:15 am, HUL stock terms was trading 1.51% little astatine ₹2,225.00 apiece connected the BSE.

Catch Stock Market Live Updates here

Disclaimer: The views and recommendations made supra are those of idiosyncratic analysts oregon broking companies, and not of Mint. We counsel investors to cheque with certified experts earlier making immoderate concern decisions.

Unlock a satellite of Benefits! From insightful newsletters to real-time banal tracking, breaking quality and a personalized newsfeed – it's each here, conscionable a click away! Login Now!

Published: 25 Apr 2024, 10:16 AM IST