Shares of fast-moving consumer goods (FMCG) giant Hindustan Unilever (HUL) rallied 5.17% to touch an intraday high as well as a new 52 week and all-time high of Rs 2,264 on BSE today. Its previous 52-week high of Rs 2,204 was recorded on February 4, 2020.
Due to the sharp rally in the large-cap stock, its market capitalisation surged to Rs 4,82,537 lakh crore, closing the gap to the Rs 5 lakh crore mark.
Volume-wise, 1.1 lakh and 30.5 lakh shares are changing hands on BSE and NSE, both above the 5,10 and 30-day average volume. The rise in the price of HUL is in line with ‘FMCG’ sector, that has risen 2.83% today, and Sensex that has risen 0.87%.
The Hindustan Unilever stock has risen 4.5% in one week, over 15% in one month and 25% in a year. Currently, Hindustan Unilever share price is trading higher than its 5, 20, 50, 100 and 200-day moving averages.
India’s largest consumer goods company has achieved remarkably rapid growth in the recent years despite weak monsoons in recent years, significant slowdown in pace of rural growth in the recent months, poor performance of the wholesale business across the country and a sharp decline in performance of personal care category growth in recent quarters, according to a Motilal Oswal report.
Commenting over the near-term perspective, MOFL added, “Favorable base in the next few quarters, the expected recovery in the demand environment from 2QFY21, synergies from the GlaxoSmithKline Consumer Healthcare Limited (GSKCH) merger, the price increase in soaps and lower crude costs are likely to boost earnings.”
The brokerage house added that the HUL stock price performance has been splendid with returns in CAGR of approx 25% in the last 10 years, 19% in 5 years and 36% over the past 3 years, respectively. “Taking into account the best Return on Equity (RoE) among consumer peers, we believe that the stupendous wealth generation track record of HUL is likely to continue. We raise our target multiple to 50x FY22E EPS on the merged numbers resulting in our target price changing to Rs 2,490 (16% upside),” said Motilal Oswal while maintaining ‘Buy’ rating.