HUL shares trade higher for second day after over 26% fall from record high

Hindustan Unilever (HUL) shares in Tuesday's trade (February 25, 2025) amid strength in the broader markets traded higher for the second consecutive session on the BSE. At around 2:40 pm, the stock traded higher by 0.76 per cent or Rs 17.05 at Rs 2,259.25. However, on the NSE, the FMCG stock snapped a 5-day losing streak tracking gains in the market. Over the past five sessions, the stock lost nearly 4 per cent on the NSE.

In fact in as many as 18 sessions so far during February, the stock ended in the green in just 3 sessions.

Importantly, from its all-time high of Rs 3,034.5 per share recorded on September 23, 2024, the stock has slumped as much as 26 per cent as against Nifty FMCG's fall of over 21 per cent during the same time.

In fact amid the continued sell-off experienced over the past 5 months, Nifty FMCG's weightage in the broader Nifty50 index has slipped drastically to 9.5 per cent, marking its lowest level since 2011. This downturn is attributed to a significant slump in FMCG stocks, which have traditionally acted as defensive assets in falling markets.

Rajesh Sinha, Sr. Research Analyst- Bonanza Portfolio noted that for the first time in 20 years, these stocks are underperforming, with the Nifty FMCG index dropping 20.2 per cent since September 2024, outpacing the Nifty 50's 12.6 per cent decline over the same period. 

Key players including HUL have seen their performance impacted by muted demand and rising input costs.

A small rally in the pack was witnessed following Budget 2025 due to income tax reductions and interest rate cuts by the RBI, nonetheless it didn't sustained amid persistent inflation concerns.

HUL's Q3FY25 earnings

FMCG major's Hindustan Unilever's standalone PAT or net profit at the company came in better than Zee Business estimates at Rs 3,001 crore as against Rs 2,519 crore in the same quarter of the previous year, marking a 19 per cent growth on-year. 

Sales at the company also registered a 2 per cent increase to Rs 15,195 crore, while the same during the corresponding period of the previous year was at Rs 14,928 crore. In the preceding quarter, the company's sales were at Rs 15,319 crore. 

Brokerage's take on HUL

BoB Capital Markets post the company's December quarter earnings reiterated its buy call on the stock with the target placed at Rs 2,859. The brokerage said the current slow demand is transitory with long-term fundamentals of rural exposure and premiumisation still in place.

Meanwhile, another domestic brokerage KR Choksey anticipated that strategic acquisitions and premiumization efforts will support long term growth recovery at HUL. Subsequently, it maintained its  accumuate rating on the stock with the target of Rs 2,610.