Shares of fast moving consumer goods (FMCG) major Hindustan Unilever (HUL) is trading higher by 1.5% to Rs 799 on BSE in otherwise subdued market.
The stock hit a record high of Rs 801.75 during intra-day trade, has rallied 12% from its recent low of Rs 716 touched on October 28 post September quarter results. The benchmark S&P BSE Sensex gained 7.3% during the same period.
The company has indicated that it would be able to manage margin expansion, even with rising excise duties, going forward.
According to analyst at Kotak Securities, HUL will likely begin to reap benefits of lower commodity prices from 3QFY15 (October – December 2014).
“While HUL's valuations are expensive relative to history, high valuations of other multi-national companies FMCG continue to be even more demanding. Further, we believe that ITC is likely to see stagnation in valuations on account of regulatory overhangs. On these counts, we think that HUL remains well-placed to see sustenance and perhaps, strengthening of re-rating that the stock has witnessed,” analyst said in a report dated October 28.
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