Shares of Hindustan Unilever Ltd declined as much as 1.9% on Thursday to hit an intraday low of ₹2,215.25 apiece on the BSE, a day after the FMCG (fast-moving consumer goods) giant reported a 6% decline in its consolidated net profit at ₹2,406 crore in the Q4 of FY24 as against ₹2,552 crore in the corresponding period of the previous year.
The scrip opened a gap-down at ₹2,246, lower by 0.5% as against the previous closing price of ₹2,259.15. At 11:51 pm, the share price of the FMCG major was trading 1.71% lower at ₹2,220. In contrast to this, the broader BSE Sensex was trading almost flat at 73,886.90. The company’s market capitalisation stood at ₹5,21,562.27 crore, with 35,087 shares exchanging hands on the BSE, as against the two-week average of 1.64 lakh shares. At present, the share price of HUL is trading 20% lower than the 52-week high of ₹2,768.50 on July 7 last year. The company hit a 52-week low of ₹2,170 on April 16 this year.
In the past one month, three months and a year, the counter has declined 1.59%, 8.63% and 10.83%, respectively. In the year-to-date period, the counter has declined 16.39%.
In the January to March quarter of FY24, the company which owns brands such as Horlicks, Dove and Pepsodent, reported flat revenue at ₹15,210 crore, as against ₹15,215 crore in the same period last year. Notably, the company’s EBITDA (earnings before interest, tax, depreciation and amortisation) stood at ₹3,535 crore during the quarter under review, as against ₹3,574 crore in the Q4 of FY23. The FMCG firm’s EBITDA margin, however, grew by 40 basis points in Q4 at 23.8%, as against 23.4% in the corresponding period of the previous year. It expects EBITDA margin to continue to remain the same in the coming quarters.
The company says that in the near term, FMCG demand will continue to improve gradually. The FMCG major is optimistic about the mid-term impact of better monsoons, and improving macro-economic indicators. The company, however, expects price growth to be low-single-digit negative “if commodity prices remain where they are.”
Notably, despite muted Q4 results, brokerage firms expect volume recovery in the near term. Analysts at brokerage firm Motilal Oswal, while giving a ‘BUY’ rating with a revised target price of ₹2,900 per share, believe that the company’s volume growth has bottomed out. It expects a gradual recovery in volume in FY25. It says that a steady growth recovery would be aided by the company’s wide range of products, and presence across price segments. Analysts at brokerage firm Nuvama has maintained a 'BUY' rating with a revised target price of ₹2,885 from ₹3,105 earlier.
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