Hindustan Unilever hits four-month low

The stock was down 3% to Rs 838 on BSE, its lowest level since June 2, 2016.

Hindustan Unilever was down 3% to Rs 838 on BSE after the company’s parent Unilever lowered its outlook for India.

The stock is currently trading at its lowest level since June 2, 2016. Since July 15, post April-June (Q1FY17) earnings, the stock underperforming the market by falling 11% as compared to 0.77% decline in the S&P BSE Sensex.

“Unilever, the world’s second-largest consumer goods company, lowered its outlook for India after reporting weak third-quarter results on Thursday, saying tepid demand and competitive intensity posed challenges to it there,” the Business Standard report suggests. CLICK HERE TO READ FULL REPORT.

Analysts expect Hindustan Unilever’s volumes to be soft in July-September (Q2FY17) impacted by muted volumes in soaps due to price hikes.

“We expect volume growth of around 2% on a base of 6% year on year (YoY) (clocked 4% YoY in Q41Y17 on a base of 6% YoY). Growth has been impacted by tough demand environment and rebalancing in the soap category due to reversal in promotions and price increase,” analysts at Edelweiss Securities said in results preview.

JP Morgan expects a subdued quarter for the consumer staples sector owing to continued demand weakness and limited pricing growth.

“Volume growth rates across most product categories remain soft amidst sustained rural weakness. The positive impact of favorable monsoon and Pay Commission related wage hikes will likely follow with a lag of 1-2 quarters. Urban demand recovery has been tepid with Modern Trade/Ecommerce channels registering better traction vs general trade,” the brokerage firm said in sector update.

At 11:24 am, the stock was down 2.3% at Rs 842 on BSE, as compared to 0.10% rise in the S&P BSE Sensex. A combined 920,795 shares changed hands on the counter on the BSE and NSE.