Deutsche Bank upgrades HUL, Colgate and Emami to buy

Mumbai: Deutsche Bank has upgraded shares of Hindustan Unilever, Colgate Palmolive India and Emami to 'buy' from 'hold' citing favourable risk reward after these stocks underperformed the Sensex by 4-10% in the last two years.

In the medium term, the end of price deflation and likely improvement in rural incomes are likely to be key drivers for these stocks.

Moreover, the incremental pro-poor policy of the government and investments in rural
distribution should fortify the competitive positioning of organized players in consumer staples, it said.

"The Modi administration has been increasingly focusing on the antyodaya philosophy (which means the uplifting of the weakest section of the society; sarvodaya is a broader term, which means development of all). The administration has been focusing on agriculture, health, sanitation and water," said Deutsche Bank.

The foreign bank has raised target price on Hindustan Unilever to Rs 1,050 from Rs 900 and on Colgate to Rs 1,100 from Rs 975. The bank has raised target price on Emami to Rs 1,200 from Rs 1,100.

On Thursday, shares of HUL ended up 0.7% at Rs 905.80 on the BSE, Colgate ended up 2.2% at Rs 978.35 and Emami ended up 0.5% at Rs 1.050.70.