HUL Down 4% Despite In-Line Q3 Numbers; Brokerages Slash Target Price

Hindustan Unilever (HUL) went down by 4% in today’s early trade by becoming the top Nifty loser. Around 9:35 am, shares of Hindustan Unilever (HUL) were trading by 2% at ₹2,294.5 apiece on the NSE.

During the December quarter, HUL reported a net profit of ₹ 3,001 crore, which was in-line with street estimates. While PAT came at ₹2,519 crore, revenue clocked at ₹15,408 crore as against ₹15,188 crore in the corresponding quarter last year. Volume growth remained flattish against the estimate of 1% growth.

What did the management say?

HUL said that it expects continuity of moderation in consumption sentiment. In case the commodity prices remain steady, the company may see low-single digit price growth. It added that EBITDA is likely to range between 23-24%.

What did the brokerages say?

1. Citi

The brokerage house continued with a ‘buy’ rating by reducing the target price to ₹2,850. Weak demand will affect the near term growth outlook of the FMCG company, it added. The brokerage has reduced the FY25-27 earnings estimates by 2-6 per cent.

2. Goldman Sachs

Continuing with its 'neutral' stance, the brokerage has reduced the target price to ₹ 2,480 from ₹2,650 per share earlier. Goldman Sachs believes that Q3 estimates were way below estimates on the EBITDA front, while also highlighting the company's decision to lower down its near-term outlook to moderating consumption environment.

3. Macquarie

Reiterating 'Outperform' call on the stock, the brokerage has set a target price of ₹ 2,800 apiece. The brokerage added that gradual pace of recovery at the company is leading to cuts in EPS and target price.