Hindustan Unilever (HUL) plunged over 1 per cent early Tuesday, a day after it came out with its earnings numbers.The FMCG major posted a 19.17 per cent year-on-year increase in standalone net profit at Rs 1,529 crore for April-June, led by a strong volume growth and sustained margin improvements.Net profit came in at Rs 1,283 crore in the June quarter a year earlier.Total income during the quarter under review stood at Rs 9,622 crore, up 3.07 per cent from Rs 9,335 crore in the same quarter in the previous year.During the quarter, our comparable domestic consumer growth was 16 per cent with underlying volume growth at 12 per cent, HUL said in a statement.Brokerages have a mixed view on HUL, post the June quarter earnings.
Credit Suisse maintained Outperform on HUL with a revised target price of Rs 1,850 against earlier Rs 1,750.The company delivered a strong quarter with a volume growth of 12 per cent and earnings growth of 21 per cent YoY.
HUL continues to maintain its objective of operating margin expansion in FY19, Credit Suisse said.However, Phillip Capital downgraded HUL to Neutral from Buy with a target price of Rs 1,710.
The stock may remain sideways despite expensive valuations.
Massive run-up in the stock price makes us cautious, the brokerage house said.Axis Capital also downgraded the stock to Hold from Buy with a target price of Rs 1,720.
Q1 reflected another quarter of solid growth.
The recent outperformance has driven stock to stiff valuations.
Bulk of this growth opportunity is already priced in the stock, Axis Capital said.Motilal Oswal maintained Buy with a target price of Rs 2,010.According to Motilal Oswal, continued broad-based volume and strong EBITDA growth despite high advertisement spend were the key highlights of the June quarter results.
Hindustan Unilevers volume growth outperformance even compared with much smaller players in recent quarters is "remarkable".
"HUL not only offers highest earnings visibility in the large-cap Indian consumer space, but also has by far the highest return ratios," it stated.The scrip plunged as much as 1.58 per cent to Rs 1,726 in early trade.Sharekhan maintained Buy on the stock of HUL with a revised price target of Rs 1,950.
Q1 FY2019 performance of HUL was bang in-line with expectations due to rising rural demand, strong traction in new launches and low base of the corresponding quarter last year, it added.On a year-to-date basis, shares of the company rallied more than 30 per cent till July 16 while the BSE Sensex advanced 7 per cent during the same period.