Shares of FMCG major Hindustan Unilever (HUL) are expected to remain in focus today after the company reported a 4% drop in its standalone net profit for the quarter ended September 2024. The net profit fell to Rs 2,612 crore, compared to Rs 2,717 crore in the same period last year.
Revenue Growth and EBITDA Performance
HUL’s revenue from operations in Q2FY25 rose by 2% to Rs 15,319 crore, up from Rs 15,027 crore in the corresponding quarter of the previous financial year. The company’s earnings before interest, tax, depreciation, and amortization (EBITDA) stood at Rs 3,647 crore, with a healthy EBITDA margin of 23.8%.
Ice Cream Business Separation
On October 23, HUL announced that its Board has decided to separate the company’s ice cream business by December, following the recommendation of an Independent Committee.
Also ReadHUL Q2 Results: Profit drops by 2.4% to Rs 2591 crore, revenue down 2.2% YoY on subdued demand
The mode of separation will be decided by the Board within the given timeframe, according to HUL CEO and Managing Director Rohit Jawa, who addressed the matter during a press conference following the Q2FY25 results announcement.
Investec Maintains ‘Hold’ on HUL
Investec has maintained its ‘Hold’ rating on Hindustan Unilever (HUL) while raising the target price to Rs 2,837 from Rs 2,797. According to the brokerage, expected growth trends are modest, with volume growth likely to remain within 4-5% in the near term. This is attributed to the lack of significant margin expansion and the absence of clear drivers for an industrial demand uptick.
Also ReadHindustan Unilever to de-merge its ice cream business post board decision
Investec notes that HUL’s 9% earnings CAGR and modest growth outlook do not justify revisiting the current rating. However, the report expects an improvement in revenue growth, primarily driven by pricing growth. Despite this, the overall growth prospects remain steady but not strong enough to alter the existing stance.
Stock Performance in Last One Year
HUL shares have demonstrated mixed returns across multiple time frames. Over the past month, the stock has given negative returns of 12.19% but the last six months have seen even more impressive results, with a substantial increase of 17.53%, indicating a strong upward trend.
Year-to-date, HUL shares have surged by just 1%,
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