Shares of Hindustan Unilever Ltd (HUL) have fallen to a fresh 52-week low, declining 6% over the past two weeks. The stock dipped to Rs 1983.15 in recent trading sessions, bringing the firm's market capitalization down to Rs 4.66 lakh crore.
Amidst this downturn, global brokerage HSBC has assigned a 'buy' call on HUL stock, projecting a 24% upside with a target price of Rs 2450 against its previous close of Rs 1995. This optimistic outlook comes despite the company's recent share performance.
Brokerage Cites Underperformance and Upcoming Capital Markets Day
HSBC's analysis highlights that HUL's 3-4% profit before tax (PBT) Compound Annual Growth Rate (CAGR) from FY24-27e is considered underwhelming, especially when compared to the double-digit growth aspirations outlined during its Capital Markets Day in 2024. The brokerage emphasizes the significance of the upcoming Capital Markets Day 2026 Webcast, scheduled for Friday, September 4, 2026, in Mumbai. This event is deemed crucial given the sustained underperformance of the HUL share price, which has seen a -1% share price CAGR between FY20-26, and recent management changes.
Technical Indicators and Q1 Financials
Technically, the FMCG stock is currently trading below all its short-term and long-term moving averages. HUL exhibits a low beta of 0.73, indicating very low volatility over the past year. The Relative Strength Index (RSI) stands at 31.2, suggesting the stock is approaching the oversold zone. An RSI below 30 typically signals that a stock is oversold, implying more sellers than buyers.
In its first quarter, HUL reported a 4% decline in standalone net profit, totaling Rs 2,631 crore. This dip was attributed to elevated raw material costs and increased expenses, partly linked to geopolitical events such as the Middle East war, which impacted profit margins. In the year-ago period, standalone net profit was Rs 2,732 crore.
Despite the profit decline, revenue from the sale of products saw a 10.3% increase, reaching Rs 17,149 crore. The company noted this turnover as its highest in the last 13 quarters. Priya Nair, CEO and Managing Director, commented on the broader economic environment, stating, "Despite global geopolitical volatility, the Indian economy demonstrated resilience, supported by proactive fiscal and monetary policy measures. The underlying demand environment remained stable during the quarter."
Disclaimer: This article provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.