HUL stock rises 4% post Q4 earnings, what should investors do?
HUL stock gained 4 per cent to Rs 2,230 against the previous close of Rs 2,144.25 on BSE.
- Apr 28, 2022,
- Updated Apr 28, 2022 11:44 AM IST
Shares of Hindustan Unilever Ltd (HUL) rose 4 per cent today after the FMCG firm reported a 8.5 per cent year-on-year (YoY) rise in standalone net profit for the quarter ended March 31, 2022. The large-cap stock opened 2.79 per cent higher at Rs 2,204 today. Later, HUL stock gained 4 per cent to Rs 2230 against the previous close of Rs 2144.25 on BSE.
The stock trades higher than 5 day, 20 day and 50 day moving averages but lower than 100 day and 200 day moving averages.
A total of 0.48 lakh shares of the firm changed hands, amounting to a turnover of Rs 10.64 crore on the BSE. Market cap of the company rose to Rs 5.17 lakh crore. The stock hit a 52-week high of Rs 2,859 on September 21, 2021 and a 52-week low of Rs 1901 on March 8, 2022.
The stock has lost 8.68 per cent in a year and fallen 6.85 per cent this year. The firm reported a profit of Rs 2,327 crore for the quarter ended 31 March, 2022 against a net profit of Rs 2,143 crore in the year-ago period.
Sequentially, the profit rose 4 per cent from Rs 2,243 crore in the December quarter.
Revenue from operations rose 10.4 per cent to Rs 13,190 crore as compared to Rs 11,947 crore in the corresponding quarter of last fiscal.
ALSO READ: HUL sales cross Rs 50K crore in FY22 but margins & volumes suffered in Q4
"In the context of unprecedented inflation, we continue to manage our business dynamically driving savings harder across all lines of P&L and taking calibrated pricing actions using the principles of Net Revenue Management. We continue to invest competitively behind our brands," HUL stated.
HUL's EBITDA, or earnings before interest, taxes, depreciation, and amortization margin at 24.6% remained healthy despite very high inflationary headwinds, it added.
The company's board has recommended a final dividend of Rs 19 for the financial year ended 31 March, 2022, subject to approval of shareholders at the AGM. Adding to interim dividend of Rs 15 per share, the total dividend for the year amounts to Rs 34 per share.
ICICI Securities has given an add call to the stock, maintaining a target price of Rs 2,145.
"HUL continues to deliver well on (1) steady premiumisation and category development, (2) enhance digital capabilities including e-commerce salience, D2C brands and improved reach (Shikhar) - digital demand capture has 20 per cent plus salience. As price-lever will have its limitation on guarding margins, the intent is to further drive cost efficiencies. Balance between cost rationalisation and investing for the future will be key again," the brokerage said.
YES Securities maintained an add call with a target price of Rs 2,380 post Q4 earnings.
"Resilient growth despite significant price hikes indicates the strong brand saliency and product superiority. We expect growth in the near-term to remain pricing and mix-led as volume growth should remain lackluster till inflation cools off and disposable incomes start increasing which is not expected for the next 2-3 quarters. The nutrition business continues to show signs of picking up post the GTM integration and market development efforts from the company," said YES Securities in a report.
"We still expect the growth to sustain in double-digits going forward as the company benefits from its WIMI strategy and wide portfolio albeit margin trajectory should come off in before building up again from late FY23 onwards. We maintain an ADD rating as we believe the valuations have become favorable post recent correction and the company is well placed to tackle this transient inflation-led soft volume growth period with offsets like cost/productivity levers coupled with and continued innovation and premiumisation, " the report added.
Shares of Hindustan Unilever Ltd (HUL) rose 4 per cent today after the FMCG firm reported a 8.5 per cent year-on-year (YoY) rise in standalone net profit for the quarter ended March 31, 2022. The large-cap stock opened 2.79 per cent higher at Rs 2,204 today. Later, HUL stock gained 4 per cent to Rs 2230 against the previous close of Rs 2144.25 on BSE.
The stock trades higher than 5 day, 20 day and 50 day moving averages but lower than 100 day and 200 day moving averages.
A total of 0.48 lakh shares of the firm changed hands, amounting to a turnover of Rs 10.64 crore on the BSE. Market cap of the company rose to Rs 5.17 lakh crore. The stock hit a 52-week high of Rs 2,859 on September 21, 2021 and a 52-week low of Rs 1901 on March 8, 2022.
The stock has lost 8.68 per cent in a year and fallen 6.85 per cent this year. The firm reported a profit of Rs 2,327 crore for the quarter ended 31 March, 2022 against a net profit of Rs 2,143 crore in the year-ago period.
Sequentially, the profit rose 4 per cent from Rs 2,243 crore in the December quarter.
Revenue from operations rose 10.4 per cent to Rs 13,190 crore as compared to Rs 11,947 crore in the corresponding quarter of last fiscal.
ALSO READ: HUL sales cross Rs 50K crore in FY22 but margins & volumes suffered in Q4
"In the context of unprecedented inflation, we continue to manage our business dynamically driving savings harder across all lines of P&L and taking calibrated pricing actions using the principles of Net Revenue Management. We continue to invest competitively behind our brands," HUL stated.
HUL's EBITDA, or earnings before interest, taxes, depreciation, and amortization margin at 24.6% remained healthy despite very high inflationary headwinds, it added.
The company's board has recommended a final dividend of Rs 19 for the financial year ended 31 March, 2022, subject to approval of shareholders at the AGM. Adding to interim dividend of Rs 15 per share, the total dividend for the year amounts to Rs 34 per share.
ICICI Securities has given an add call to the stock, maintaining a target price of Rs 2,145.
"HUL continues to deliver well on (1) steady premiumisation and category development, (2) enhance digital capabilities including e-commerce salience, D2C brands and improved reach (Shikhar) - digital demand capture has 20 per cent plus salience. As price-lever will have its limitation on guarding margins, the intent is to further drive cost efficiencies. Balance between cost rationalisation and investing for the future will be key again," the brokerage said.
YES Securities maintained an add call with a target price of Rs 2,380 post Q4 earnings.
"Resilient growth despite significant price hikes indicates the strong brand saliency and product superiority. We expect growth in the near-term to remain pricing and mix-led as volume growth should remain lackluster till inflation cools off and disposable incomes start increasing which is not expected for the next 2-3 quarters. The nutrition business continues to show signs of picking up post the GTM integration and market development efforts from the company," said YES Securities in a report.
"We still expect the growth to sustain in double-digits going forward as the company benefits from its WIMI strategy and wide portfolio albeit margin trajectory should come off in before building up again from late FY23 onwards. We maintain an ADD rating as we believe the valuations have become favorable post recent correction and the company is well placed to tackle this transient inflation-led soft volume growth period with offsets like cost/productivity levers coupled with and continued innovation and premiumisation, " the report added.