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Hindustan Unilever Ltd (HUL) shares rose nearly 2 per cent to Rs 2,457.90 on the BSE in intra-day trade on Friday, in an otherwise weak market, on a positive outlook. The stock of the fast-moving consumer goods (FMCG) company was trading close to its 52-week high level of Rs 2,504.30, touched on April 13, 2021. It was trading higher for the fourth straight days. In comparison, the S&P BSE Sensex was down 0.66 per cent at 51,994 points at 12:35 pm.
In the past four days, Hindustan Unilever has outperformed the market by gaining 4 per cent, as compared to a 1.2 per cent decline in the benchmark index.
With various parts of India progressively opening up, the management of Hindustan Unilever believes the impact from the second COVID wave would have peaked in May 2021 and things will progressively get better. The outlook from June 2021 onwards is positive, barring the emergence of a third COVID wave.
An uptick in GDP growth will likely percolate to consumer demand and accelerate penetration growth, premiumization, and shift to branded in key FMCG categories. Thus, absolute FMCG earnings growth too could accelerate in such an environment, even though relative performance appears weaker on earning growth.
Stock Covered in the news
