Thu Oct 24 16:00:40 UTC 2024: Hindustan Unilever Ltd (HUL) has reported its Q2 results, which align with expectations, but its volume growth of 3% fell short of the anticipated 5%. The company indicated that demand momentum is unlikely to accelerate in the near term, with margins expected to remain stable over the next two quarters. As a result, analysts have slightly reduced their earnings per share (EPS) estimates and some have lowered their price targets for HUL stock following these results.

Key points:

– Volume growth of 3% is lower than the expected 5%.
– Management has provided a cautious outlook, suggesting steady margins in the short term.
– Nirmal Bang has cut EPS forecasts for FY25 and FY26 by 1.5-3.5% due to muted growth projections.
– Historical analysis shows HUL’s stock outperformance despite a lower sales CAGR in the past.
– Analysts maintain a “Hold” rating, with a targeted price reduction from Rs 2,875 to Rs 2,805.
– Emkay Global retains a “Buy” rating, citing long-term opportunities despite near-term challenges, with a revised target price of Rs 3,225.
– MOFSL has revised EPS estimates down by 2% for FY25 and FY26 but maintains a “Buy” rating, with a target price of Rs 3,200.
– Under new CEO Rohit Jawa, HUL aims to address market opportunities especially in Beauty & Personal Care (BPC) and Foods & Refreshment (F&R).

Overall, analysts suggest cautious optimism for HUL’s long-term growth given external challenges and internal strategies for correction.

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