Brokerages raise HUL price target, stock gains 2.3% post Q2 numbers

Mumbai: Some brokerages have raised the target price on Hindustan Unilever (HUL) after the company’s September quarter earnings. Rich valuations, however, led to several brokerages maintaining their ‘neutral’ or ‘hold’ rating on the stock. Hindustan Unilever on Monday posted a 21 per cent year-on-year rise in net profit at Rs 1848 crore after incorporating the reduction in corporate tax rate. Excluding corporate tax rate benefit, the profit figure came in at Rs 1832 crore, up 20 per cent. Volume growth rose 5 per cent in the September quarter.

Shares of Hindustan Unilever ended up 2.4 per cent at Rs 2063.3 on Tuesday.

CLSA has retained ‘outperform’ rating and raised target price to Rs 2250 from Rs 2135. The brokerage has raised EPS estimates by 1-2 per cent on better margins.


“HUL 2QFY20 results exceeded our estimates on all counts... Recent personal care price cuts reflect management’s growth focus," said CLSA.

The GSK merger would add at least 6 per cent to EPS but could pressure supply as GSK would likely sell its 5.7 per cent HUL stake, the brokerage added.

ICICI Securities said volume growth at 5 per cent was slightly higher than consensus expectations and even raised target price to Rs 2100 from Rs 2000. However, the brokerage has maintained a ‘hold’ rating and said lower multiples are needed to turn more constructive.

Citi has raised target price to Rs 2090 from Rs 1950 but maintained neutral rating citing subdued demand outlook for the next few quarters.

HSBC has maintained a ‘buy’ rating and raised target price to Rs 2290 from Rs 2020. HUL is a structural winner in the context of the near-term narrative of a slowdown, said HSBC.

“We think HUL is one of the best ways to play the India consumption story,” said HSBC.