HUL share price falls after muted Q4 results; brokerages cut target price; Should you buy, sell or hold the stock?

livemint.com:

₹2,218.00 apiece on the BSE after muted Q4 results. FMCG major Hindustan Unilever (HUL) reported a standalone net profit of ₹2,406 crore in Q4FY24, registering a decline of 6% from ₹2,552 crore in the same period last year. The company’s revenue from operations rose marginally to ₹14,693 crore from 14,638 crore, YoY, with 2% volume growth.

HUL’s Home Care (HC) segment grew 1% YoY, whereas the Beauty & Personal Care (BPC) segment contracted 2% YoY and Foods & refreshment (F&R) delivered pricing-led growth of 4% YoY. Read here: Is consumption demand recovering? HUL bosses think so At the operating level, EBITDA declined 1% YoY to ₹3,435 crore, while the EBITDA margin contracted 20 bps to 23.1%. The FMCG major also declared a dividend of ₹24 per share.

In the transition phase of the last 12 months, HUL’s volume growth was weak and value growth was affected by price cuts. Analysts expect a gradual recovery in volume growth in FY25, driven by own initiatives and gradual improvement in demand. Here’s what brokerages said on HUL Q4 results and HUL share price: Motilal Oswal believes that Hindustan Unilever’s volume growth has bottomed out and expects a gradual volume recovery in FY25.

HUL’s wide product basket and presence across price segments should help the company achieve a steady growth recovery. There is scope for a turnaround in part of BPC and F&R; we will monitor the execution in these segments under the new CEO. The valuation at <45x FY26E EPS is reasonable given its last five-year average P/E of 60x on one-year forward earnings, Motilal Oswal said.