Mumbai: Hindustan Unilever Ltd, India’s largest packaged consumer products firm by sales, on Tuesday became the country’s eighth company to cross Rs3 trillion market capitalisation after its shares surged over 70% in the last one year.
The stock touched a fresh record high of Rs1,388.45 on the BSE, up 1.4% from its previous close with a market cap of Rs3.01 trillion. The Sensex index was trading marginally higher by 0.18%. At 10.03am, HUL was trading at Rs1,385 on the BSE, up 1.3%.
Earlier, seven companies have crossed this landmark—Reliance Industries Ltd (RIL), Tata Consultancy Services Ltd (TCS), HDFC Bank Ltd, ITC Ltd, Maruti Suzuki India Ltd, Housing Development Finance Co. Ltd and Oil & Natural Gas Corp. Ltd.
Currently, RIL is India’s most valued company with a market capitalisation of Rs6 trillion, followed by TCS and HDFC Bank at Rs5.28 trillion and Rs4.92 trillion, respectively.
“We believe HUL will be a key beneficiary of an uptick in consumption growth led by cyclical recovery and a pick-up in rural markets. Factors like a supportive base and normalisation of trade channel should also help,” brokerage firm CLSA said in a 4 January report.
CLSA has retained its outperform rating on the stock and increased its target price to Rs1,515 from Rs1,460 a share.
“Recent cuts in GST on daily use items like detergents and skincare benefit nearly half of HUL’s portfolio which should improve volume growth as well as drive premiumisation. There however may be some pain in 3QFY18 due to tax changes but the benefits should be visible thereafter,” the report added.
Of the 47 brokers tracking the HUL stock on Bloomberg, as many as 28 recommended a “buy” rating, four asked its investors to “sell” the stock and 15 have a “hold” rating.
The company will announce its December quarter earnings on 17 January. According to 14 Bloomberg analysts’ estimates, the firm may post a net profit of Rs1,168.90 crore, while net sales will be at Rs8,419.70 crore.
According to a 9 January ICICI Securities report, it expects gross margin of the company to expand 60 basis points and expect earnings before interest, tax, depreciation and amortisation (Ebitda) margin to expand 110 bps year-on-year. Ebitda and net profit are expected to increase 18.4% year-on-year and 25.1%, respectively.livemint