Hindustan Unilever shares gain as brokerages set higher target; check details

Another global brokerage Nomura pointed to Q3 market demand trends, according to which rural growth is decelerating and urban is witnessing recovery. The brokerage firm maintained its buy call with an almost 20 percent higher target price of Rs 2,950 per share as it said HUL’s category rebalancing is leading to a better mix. The volumes are likely to go up 2 percent Y-o-Y and 2-year volume CAGR estimates are at 3 percent, it said. The brokerage also said the firm’s cumulative price hike will be higher during the quarter as against Q2.

The remark on the price hike comes as HUL hiked prices of its soaps and detergents earlier in November citing significant inflationary pressures.

Motilal Oswal was also of the view that rural India is in a slowdown and a better mix and price increases are likely to support HUL’s operating margin. The brokerage increased its target price on the stock to Rs 2,800 and maintained a ‘buy’ rating.

“The transient slowdown in rural India and elevated input cost inflation causes us to remain cautious on the stock in the near term. Nevertheless, the structural story for HUVR remains intact,” research analysts at Motilal Oswal said in a report on December 21.

Meanwhile, global brokerage Macquarie has an ‘outperform’ call on the shares of HUL with a target price as high as Rs 3,300 apiece. There’s been a sustained recovery in discretionary segments and moderation in hygiene sale volumes, the brokerage said, adding that sharp price hikes will cover inflation could weigh on Q3 volumes. Macquarie expects a pick-up in volume growth in the latter part of FY23 to aid the company’s performance.