HUL share price slips 7% post Q2 results; Should you buy, sell or hold?

Hindustan Unilever (HUL) reported a net profit of Rs 2,591 crore as compared to Rs 2,668 crore which translates to a decline of 2.8 per cent

Hindustan Unilever or HUL shares slipped 6.9 per cent in trade on Thursday and clocked an intraday low of Rs 2,587.55 per share on BSE. The selling pressure in the stock came after the company's second quarter (Q2FY25) numbers missed the street's estimates. 

 

At around 9:24 AM, HUL shares were down 4.03 per cent at Rs 2550.95 per share. In comparison, the BSE Sensex was up 0.07 per cent at 80,134.74 at around the same time. The market capitalisation of the company at around the same time stood at Rs 5,99,368.98 crore. 

 

In its Q2 results, HUL reported a net profit of Rs 2,591 crore as compared to Rs 2,668 crore which translates to a decline of 2.8 per cent. Business Standard consensus suggested the net profit to decline to Rs 2,664.8 crore. 

 

The Fast Moving Consumer Goods (FMCG) giant's revenue for Q2 stood at Rs 15,926 crore as compared to Rs 15,623 crore a year ago, which implies a growth of 1.9 per cent. Business Standard's estimate for revenue for Q2 was at Rs 15,659.13 crore.  

Management commentary

“In the September quarter, FMCG demand witnessed moderating growth in urban markets, while rural areas continued to recover gradually. In this context, we delivered a competitive and profitable performance,” Rohit Jawa, managing director and chief executive officer at HUL, was quoted as saying in the company’s earnings release.

 

He added: We remain watchful of the gradual recovery in consumer demand while creating a sustained competitive advantage through our business fundamentals of investing behind our aspirational brands, scaling market-making innovations, and maintaining operational rigour. 

 

Should you buy, sell or hold HUL shares? 

Motilal Oswal has reiterated a 'Buy' call on HUL for a target price of Rs 3,200 per share. 

"Under the new leadership of Jawa is expected to take corrective actions to address the white space, particularly in beauty and personal care and food & refreshment. The company commands strong leadership in home care, which can be capitalised during improving macros," the brokerage said. 

 

Kotak Institutional Equities has given an 'Add' call on HUL with a target of Rs 2,850 per share.

 

"Management indicated that rural is coming back slowly, but urban demand has slowed down and could restrict further acceleration in Underlying Volume Growth (UVG)," Kotak analysts said. 

 

Conversely, Centrum retained a 'Reduce' rating on the back of a slowdown in demand. 

 

The brokerage has given a target of Rs 2,697 per share.   Meanwhile, as per reports, Investec maintained 'Hold' on HUL and gave a target price at Rs 2,837 per share. Jefferies continued with a 'Buy' and gave a target price of Rs 3,130 per share and Morgan Stanley maintained 'Overweight' and gave a target price of Rs 3,130 per share.

 

In the past one year, HUL shares have lost 5.3 per cent against Sensex's rise of 25 per cent.