Hindustan Unilever hits new high; surpasses SBI in m-cap ranking

Thus far in the calendar year 2017, HUL rallied 33% against 16% rise SBI and 17% gain in Sensex.

Hindustan Unilever (HUL) hit a new high of Rs 1,095, up 2.6% on the BSE; extending its 8% gain of the past nine trading sessions, after the country’s largest consumer goods company, reported a better-than-expected March-quarter result (Q4FY17).

The company’s ebitda (earnings before interest, tax, depreciation and amortization) margin improved 90bps to 18.8% from 17.9% reported in the previous year quarter.

Volume growth, a crucial metric tracked by most analysts and investors, came in at 4% for the March quarter, after two consecutive quarters of decline.

“After registering 4% decline in underlying volume growth in December quarter, this performance was inspiring, particularly when peers were struggling. We are encouraged by HUL’s broad-based growth, as home care, personal care and refreshments verticals registered healthy 7%, 8% and 11% growth respectively,” analyst at HDFC Securities said in result update.

The brokerage firm expects the stock to give healthy returns in the near term as stable raw material prices with healthy premium segment growth can expand margins in the coming quarters.

Analysts at Emkay Global Financial Services believe HUL is gradually moving into a phase which would witness a double digit revenue growth and sustained improvement in margin. Consumer confidence has improved and a normal monsoon will drive rural demand.

Meanwhile, a strong run in the market price of HUL saw the company surpassing state-owned banking giant State Bank of India (SBI) in overall market capitalization (market-cap) ranking.

With the market-cap of Rs 236,780 crore, HUL now stands ahead of SBI, which has market-cap of Rs 233,767 crore, the BSE data showed.

Thus far in the calendar year 2017, HUL has rallied 33% as compared to 16% rise in the market price of SBI. On comparison, the S&P BSE Sensex was up 17% during the period.