Hindustan Unilever share price underperform Nifty, Sensex in one year . Should you buy, sell or hold.
Hindustan Unilever share price has declined 7% in last one year and was down almost 1% in intraday trades on Monday. Hindustan Unilever remains amongst few underperformers compared to gains seen by the benchmark indices. The Nifty-50 index during the period is up more than 13% and S&P BSE Sensex is up 12.55% The volume growth remains a key concern for the companies in the consumer discretionary space and Hindustan Unilever has seen the impact.
The Fast-moving consumer goods (FMCG) companies also have seen impact of rising adverting and promotions costs impacting their earnings as competition remains high. The weak rural demand remains a concern too. The monsoon season has not been satisfactory as rainfall distribution was not even and many regions didn’t receive adequate rainfall.
Monsoon activity remained weak. The rising food prices and no uptick in Rural wages also remains a reason for rural demand recovery remaining elusive. Also Read- Nuvama bullish on tier-2 IT stocks, LTIMindtree among its top picks; here's why The July September quarter revenue growth stood at 4% YoY which was lower than 16% seen in Q2FY23 and 7% in Q1FY24 pointed out analysts at HDFC Securities.
The Domestic volume growth, at 2%, also came below their estimates of 3%. After weak Q2 performance analysts don’t see much respite to have taken place in October. Analysts at Jefferies India Pvt Limited in their report on October volume performance said that “Our channel checks & industry interactions indicate October demand trends remained similar to second quarter, with much anticipated growth pick-up during festive season not materializing".
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