Multiple near-term worries likely to keep HUL stock under pressure

A YoY fall in volumes in the March quarter would be a first in seven quarters

There are multiple near-term worries for the stock of India's largest listed consumer company, Hindustan Unilever (HUL). While inflationary pressures will weigh on its profitability, demand pressures especially in the rural market are expected to hit its revenues. This has led brokerages to cut the earnings estimates for FY23 by 7-10 per cent. The demand/margin woes have led to a 15 per cent correction in the stock price from its highs in February.

The industry demand situation has deteriorated sequentially given consecutive price hikes. According to Nielsen, categories where HUL is present have reported flat sales (by value) and single