Hindustan Unilever (HUL) shares soared on Wednesday, June 5, following a significant upgrade from global brokerage Jefferies, which elevated the stock from ‘hold’ to ‘buy.’ This positive reassessment sent HUL shares up nearly seven percent to a high of Rs 2,662.95 on the NSE during early trading.
Jefferies has raised its price target for HUL from Rs 2,530 to Rs 2,950, citing the stock’s potential to benefit from a likely uptick in rural demand. The brokerage’s note highlighted that HUL, despite underperforming over the past five years, is now valued near its five-year average, making it an attractive investment. Jefferies also increased its EPS estimates for HUL by 1-3% and anticipates growth to pick up in FY25.
HUL’s Q4 results, however, showed a mixed performance. The company reported a consolidated net profit decline of 1.53% to Rs 2,561 crore for the fourth quarter of FY24, down from Rs 2,601 crore in the same period the previous year. This dip was attributed to deflation from softening commodity prices. Net sales remained nearly flat at Rs 15,013 crore for the March quarter.
HUL’s total expenses rose by 1.15% to Rs 12,100 crore, compared to Rs 11,962 crore a year ago. The company’s total income for the quarter was Rs 15,441 crore, slightly up from Rs 15,375 crore in the previous year.
Despite these modest quarterly results, Jefferies’ upgrade and increased price target reflect optimism about HUL’s future performance, particularly in rural markets, positioning the FMCG giant for potential growth in the coming years. Investors are now considering whether to buy, sell, or hold HUL shares, given this positive outlook.
