HUL Q4 Results: Analysts Keep The Faith Despite Weak March Quarter Performance
Bars of Hindustan Unilever Ltd. Lux soap are displayed for sale on a shelf at a store in Mumbai, India. 9Photographer: Kuni Takahashi/Bloomberg)

HUL Q4 Results: Analysts Keep The Faith Despite Weak March Quarter Performance

Hindustan Unilever Ltd. reported its lowest revenue in nine quarters as the coronavirus pandemic and nationwide lockdown dented demand and disrupted supplies. But that's not shaking analysts' faith in the company.

Brokerages have retained their ratings on the stock, and a few, including HSBC and Phillip Capital, have raised the target price.

India's largest fast-moving consumer goods company's sales volume fell seven percent in the January to March period, and its margin contracted to 22.9 percent from 23.3 percent in the same quarter last year.

The one-off quarter does not reduce HUL's structural appeal, according to HSBC, while Phillip Capital termed the March quarter performance a "short-term blip". Emkay cautioned that the growth uncertainty limits the upside for the stock, while IDFC Securities noted that consumers are likely to turn more value-conscious in the future.

57 percent of the 42 analysts tracking HUL have a 'Buy' recommendation, according to Bloomberg data. The 12-month consensus target price is Rs 2,342.66, which indicates a return potential of 6.7 percent from Thursday's closing price.

HUL shares have gained 14.14 percent so far in 2020 compared to the NSE Nifty 50 Index's 19 percent fall so far this year.

Here’s what brokerages had to say about HUL’s Q4 results:


Maintains ‘Buy’, raises target price to Rs 2,650 from Rs 2,350

  • Lockdown quarter weighs, uncertainty in demand persists
  • One-off quarter does not reduce HUL’s structural appeal
  • Company will spring back to growth once conditions normalise
  • Long-term valuations ‘resonable’


Maintains ‘Hold’, leaves target price unchanged at Rs 2,300

  • Growth uncertainty limits upside
  • Company sees supply constraints easing
  • HUL ramping up overall manufacturing to around 80 percent levels
  • Demand remains uncertain but hygiene products see uptick

Phillip Capital

Maintains ‘Buy’, target raised to Rs 2,450 from Rs 2,300

  • Short term blip in structural story
  • Expect earnings before interest, taxes, depreciation, and amortisation margins expansion to continue
  • Management’s unabated focus remains on driving cost efficiencies
  • Market share likely to rise as peers’ positions weakens

IDFC Securities

Retains ‘Outperform' rating, cuts target price to Rs 2,358 from Rs 2,464

  • Consumer buying behaviour skewed towards food and hygiene
  • Consumers to turn more value conscious
  • Expect sharp rebound in the financial year 2021-22

Prabhudas Lilladher

Maintains ‘Hold’, retains target price at Rs 2,017

  • Supply chain disruptions and income erosion make demand uncertain
  • Recovery expected in personal care segment
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