Top global brokerages see up to 15% rally in HUL post Q4 results

NEW DELHI: Top global brokerage firms such as CLSA, BofA-ML and Credit Suisse in separate notes to their clients have maintained their bullish views on HUL after the March quarter results even though the FMCG major reported profit growth in single digit.

Among the three global brokerages, BofA-ML has recommended the most aggressive 12-month target price of Rs 975, which translates into a 15 per cent upside from Monday’s closing price of Rs 846.10 on the BSE.

Hindustan Unilever reported single-digit profit and sales growth for the quarter ended March 31 and indicated that it is difficult to confirm a steady demand revival.

India’s largest consumer goods company on Monday reported a 7 per cent year-on-year increase in fourth quarter net profit at Rs 1,090 crore, helped by higher exceptional income and 4 per cent sales growth at Rs 7,809 crore.

ETMarkets.com collated list of recommendations on HUL from top global brokerages after the Q4 results:



CLSA on HUL: Underperform | Target price Rs 800

CLSA maintains an underperform rating on HUL post Q4 results with a 12-month target price of Rs 800. The global investment bank in the report said the tapering of volume growth to an eight-quarter low of 4 per cent is worrisome.

It has slashed demand estimates which led to 2-3 per cent earnings per share (EPS) cut over FY17-18. CLSA sees a gradual uptick in input prices along with muted near-term demand trend.

BofA-ML on HUL: Buy | Target price Rs 975

BofA-ML maintains a buy rating on HUL post Q4 results with a 12-month target price of Rs 975. The investment bank believes that key negatives i.e. rising tax rate, removal of excise benefits are behind us.

The management focus on volume growth, profitability and premiumisation is a positive and is a step in the right direction. A likely buyback or a special dividend will be a key trigger for the stock.

Credit Suisse on HUL: Outperform| Target price Rs 930

Credit Suisse maintains an outperform rating on HUL post Q4 results with a 12-month target price of Rs 930. The volume growth has slowed down, but price deflation has come to an end.

HUL saw a deceleration in volume growth to 4 per cent, breaking a very consistent band of 5-6 per cent, this is worrisome. Credit Suisse slashed its earnings forecasts by 4 per cent as the volume trajectory has deteriorated.

The global investment bank expects a couple of soft quarters for volume growth but believes that price growth will improve going forward.

(Views and recommendations expressed in this section are the analysts' own and do not represent those of EconomicTimes.com. Please consult your financial advisor before taking any position in the stocks mentioned.)