Should you buy or hold HUL shares post Q1 results?

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Shares of FMCG major Hindustan Unilever were trading at Rs 2,368.50 down by Rs 9.65 or 0.41%. A day after the company reported an increase of 10.7% in its consolidated net profit at Rs 2,100 crore for the first quarter ended June, 2021. The FMCG major had posted a net profit of Rs 1,897 crore in the April-June quarter of the previous fiscal.

Its net sales during the quarter under review stood at Rs 11,966 crore, up 13.21%, as against Rs 10,570 crore in the corresponding period a year ago, Hindustan Unilever Ltd (HUL) said in a regulatory filing.

Here is what brokerages are saying about HUL’s Q1 performance:

Motilal Oswal | Rating: Buy | Target: Rs 2,840

The company continues to strengthen the key drivers of its success in India over the last decade.

After premiumization in detergents led to strong growth in detergent sales and margin in the last decade, the personal wash and dishwashing segments show considerable promise going forward.

Sharekhan | Rating: Buy | Target: Rs 2,790

Sharekhan reduced its earnings estimates by 3% to factor in lower-than-earlier-expected OPM while we have maintained estimates for FY2023. Strengthening of core brands, creating categories of future through market development, driving premiumisation by straddling product pyramid and focusing on creating bigger brands and better tapping of emerging trends are some key long-term growth strategies.

Prabhudas Lilladher | Rating: Accumulate | Target: Rs 2,535

Although HUL used to guide for calibrated margin expansion, however inflation in laundry, skin cleansing and Tea inputs and focus on driving volumes is likely to curtail margin expansion to levels lower than earlier expectations. Citing this Prabhudas Lilladher cut FY22/23 EPS (earnings per share) by 4.2%/3.2% and downgrading the stock to accumulate.