HUL share price target: What should investors do with Hindustan Unilever shares post in-line Q4 results?

HUL Q4 results, HUL share price: Hindustan Unilever (HUL) shares hogged the limelight on D-Street on Thursday, April 25, a day after the FMCG major reported an in-line Q4 earnings report. The FMCG stock declined as much as 1.99 per cent to the day's low of Rs 2,215.1 on NSE in morning deals. The stock closed at Rs 2,234.6, down 1.13 per cent on NSE. 

HUL Q4 results

Post market hours on Wednesday, HUL reported a 1.53 per cent decline in consolidated net profit to Rs 2,561 crore for the fourth quarter of FY24 on account of deflation due to softening of commodity prices.

The company had posted a net profit of Rs 2,601 crore in the year-ago period, according to a regulatory filing from HUL. Net sales of Hindustan Unilever Ltd (HUL) were almost flat to Rs 15,013 crore in the March quarter.

While HUL's total expenses were up 1.15 per cent to Rs 12,100 crore in the March quarter from Rs 11,962 crore a year ago. The total income of HUL during the fourth quarter of the previous fiscal was flat at Rs 15,441 crore as against Rs 15,375 crore a year ago.

"HUL delivered a resilient performance in Q4 with underlying sales growth of 1 per cent, underlying volume growth (UVG) of 2 per cent and EBITDA margin at 23.4 per cent," HUL said in its earning statement.

In the March quarter, HUL's gross margin improved 350 bps year-on-year and its advertising and promotional (A&P) investments increased 200 bps as it continued to step up investments on its brands.

However, HUL's "EBITDA at 23.4 per cent declined 30 bps primarily on account of 60 bps impact from termination of GSK consignment selling arrangement and investments in long-term capabilities". Read more on HUL Q4 results

HUL share price target: What should investors do?

Goldman Sachs has maintained a neutral call on Hindustan Unilever. The brokerage has trimmed the target to Rs 2,475 from Rs 2,550. The brokerage has highlighted the following key points: 

• Weak performance continues, deterioration in soaps becomes more concerning
• Sharp deterioration in the soap business, recovery could take a few quarters
• HUL investing in premium segments of each category
• Near near-term to remain muted

HUL dividend 2024

The board of HUL has proposed a final dividend of Rs 24 per share, on equity shares of Re 1 each, subject to approval of shareholders at the AGM.

Management Commentary

HUL CEO and Managing Director Rohit Jawa the company has delivered a "resilient performance" in FY24.

"We remain focused on driving operational excellence and have continued to build back our gross margins while stepping up investment in brands and long-term capabilities. Looking forward, I am optimistic of consumer demand gradually improving due to a normal monsoon and better macro-economic indicators," he said.

(with PTI inputs)

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