The stock hit an all-time high of ₹2,580 on the Bombay Stock Exchange, trading at ₹2,575, up 3.5% from its previous close with a market cap of ₹6.05 trillion
Mumbai: Hindustan Unilever Ltd has hit a market capitalisation of ₹6 trillion after its shares surged over 20% in the last year, making it the fifth Indian firm to achieve this milestone.
The stock hit an all-time high of ₹2,628.85 on BSE Ltd, closing at ₹2,617, up 5.4% from its previous close with a market capitalisation of ₹6.15 trillion. The scrip was trading higher for the seventh consecutive session and gained over 10% in this period.
Earlier, Reliance Industries, Tata Consultancy Services Ltd, HDFC Bank and Infosys have achieved this milestone.
Last month, the firm reported its June quarter earnings and its topline suffered marginal erosion on a sequential basis (-1.8% QoQ) owing to lockdown, however, it improved12.8% YoY, aided by a 9% underlying growth in volumes during the quarter.
Ebitda margin came under pressure shrinking 50 bps QoQ to 23.9% on deteriorated product mix and higher costs. Adjusted profit after tax declined 6.7% QoQ.
"As the company strives to improve sales for its premium category of products, a steady growth in volumes across the broader portfolio remains key. The performance in the coming quarters depends on a steady pickup in consumer demand, especially in the rural areas, which itself would rely on a good monsoon. Inflationary pressure on inputs may require further passing-on of costs to the consumers to sustain margins", said Geojit report to its investors.
"Additionally, while the progress on integration of GSK’s nutrition business remains on track, the penetration remains low and so do the margins. We expect the overall margins to remain under pressure in the near term and downgrade our rating to HOLD with a revised target price of Rs. 2,540 based on 54x FY23E Adjusted EPS", Geojit report added.
The company's management said that the near-term demand outlook remains challenging due to restricted consumer mobility, however, it expects rural demand to be stronger. It believes that focus on digital intervention through Shikhar is gaining good traction as digital-led e-commerce efforts are showing an improved trajectory for business.
Brokerage firm Motilal Oswal says that despite the higher incidence of covid-19 cases in rural India compared to last year, the demand momentum remains resilient. The expectation of a good monsoon should sustain this momentum. Urban demand is expected to see a strong rebound. With discretionary demand back on the recovery path, mix improvements will play a major role in driving a gradual margin improvement sequentially.
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