HUL stock check: Down 3% in 2023 so far, should you bet on the FMCG major now?

livemint.com:

Hindustan Unilever (HUL). The company's stock has declined over 3 percent this year so far against a gain of 15 percent in the benchmark Nifty FMCG index. The stock declined 1 percent in the last 1 year compared to the Nifty FMCG index rising over 16 percent during the period.

The stock gave positive returns in 5 of the 10 months so far this year and negative returns in the remaining 5 months. The stock is flat in October so far, up 0.2 percent, snapping 3 straight months of losses. Between July and September, it shed 8 percent.

However, it rose the most, 8.5 percent, in the month of May. Even though the market witnessed an extraordinary bull run in the last few months, hitting multiple peaks; HUL was not a part of the same. The stock is still over 13 percent away from its record high of ₹2,859.30, hit on September 21, 2021.

It hit a 52-week high mark of ₹2,769.65 this year in July but has lost over 10 percent since then. Currently trading at ₹2,476.40, the stock has advanced only 3.5 percent from its 52-week low of ₹2,393, hit in March 2023. In the long term as well, the stock has not been a strong performer.

It has risen only 13.5 in the last 3 years versus a 71 percent jump in the Nifty FMCG and a 60 percent rise in the benchmark Nifty. HUL reported a 4 percent year-on-year (YoY) rise in its standalone net profit for the second quarter ended September (Q2FY24) at ₹2,717 crore. The company had reported a profit of ₹2,616 crore in the year-ago period.

Sequentially, the net profit was up 10 percent. Its total revenue from operations was also up just 3.6 percent YoY to ₹15,276 crore from ₹14,751 crore in the year-ago period. Its EBITDA margin for the quarter ended September witnessed some recovery.