Home/ Markets / Stock Markets/  As Hindustan Unilever gets new CEO, what it means for the FMCG stock?

Shares of Hindustan Unilever Ltd (HUL) rose marginally on the BSE in Monday's early deals as the company has appointed Rohit Jawa as new chief executive and managing director (MD & CEO) for a 5‐ year period and he will succeed Sanjiv Mehta, who has been serving for the last 10 years.

“We expect Mr Jawa to do well and his KRAs in our view will be propping up GSK portfolio to be a major growth driver for HUL, scale up recent acquisitions in D2C and remain agile for more acquisitions in D2C, much bigger play in Naturals, keeping HUL ahead of transformation in sector," said domestic brokerage and research firm Nuvama Research. 

What makes Nuvama positive on Mr Jawa: He has thorough understanding of the Indian FMCG market (headed west India sales and operations) and has led transformation of Unilever businesses in China, Philippines. Mr Mehta has set an impressive tenure, but HUL is India’s CEO factory. 

“HUL continues to maintain industry leadership on the back of market development, portfolio turnaround and branding investments with premiumisation being a critical driver. Overall, we remain positive on HUL’s ability to maintain its lead across segments and drive growth across both rural and urban regions," the brokerage added while maintaining ‘BUY/SO’ on the FMCG stock with a target price of 3,365.

“We note Mr Sanjeev Mehta has delivered superlative performance in last 10 years’ reflected in topline (crossed 500 bn+) with an 4x rise in HUVR’s market cap. Though Rohit’s appointment comes handy, given Hindustan Unilever is a strong process driven company managing growth agenda is not easy in our view," said analysts at Centrum Broking.

They added that need to be watchful, as how business contours would change in the context of macro headwinds, slower growth in rural markets, and weaker than expected performance for GSK‐CH business. Centrum remains positive with this development, and has retained ADD rating with Target Price of 2,797 per share.

The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

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Updated: 13 Mar 2023, 12:04 PM IST
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