Hindustan Unilever Ltd. (HUL) is in the news on Thursday, January 23, because they just shared their earnings for the third quarter of the year. The company made a net profit of Rs 3,001 crore, which is a 19% increase compared to the same time last year. This good news was partly due to a special gain of Rs 509 crore from selling their Pureit business. However, their regular profits didn’t change much.
HUL’s sales grew by 2% to reach Rs 15,195 crore this quarter, but the number of products sold didn’t really increase. HUL’s management said there’s still not much demand for their products, especially in cities, while rural areas are slowly getting better.
CEO Rohit Jawa commented, “In this tough environment, we focused on making our brands stronger and kept our profits healthy.” The operating profit went up slightly to Rs 3,570 crore, but profit margins decreased a bit to 23.5%.
Analyst Opinions
As for what to do with HUL’s stocks, here’s what some analysts are saying:
– UBS: They believe it’s best to hold on to HUL shares, setting a new target price of Rs 2,700 because of the company’s weak performance in selling products. They think demand will stay low.
– Nuvama: They are a bit more positive and suggest buying HUL stocks, now targeting Rs 3,225. They mentioned that while sales weren’t as strong, overall results were okay. They’ve adjusted their profit predictions for the next couple of years due to rising material costs.
– Citi: They also suggest buying HUL shares but have lowered their target price to Rs 2,850. They pointed out weak demand could impact future growth. HUL recently made a deal to buy Minimalist to expand in the beauty market.
– Goldman Sachs: They think it’s best to hold HUL shares, lowering their target price to Rs 2,480. They noted that HUL’s financial performance wasn’t as good as expected, mainly because more people are choosing smaller packages and soap sales have dropped.
– Investec: They suggest holding onto HUL shares with a target price of Rs 2,643. They see no quick recovery ahead and warn of weak demand across the market.
In conclusion, there’s a mixed view on what to do with HUL’s shares, with many analysts keeping an eye on how the company deals with current demand challenges.
Disclaimer: The views and opinions in this article belong to the analysts and do not reflect the views of The Economic Times
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