HUL spurts 5 per cent, nears Rs 5 lakh cr M-cap

Mumbai: FMCG major Hindustan Unilever gained over 5 per cent on BSE and NSE to a new all-time high of Rs 2,271 per share and its market cap surged to near Rs 5 lakh crore at Rs 4,89,344.94 crore.

HUL shares closed at Rs 2260.45, up 5 per cent on the BSE after hitting a new a record high during the day’s trading.

The BSE FMCG Index gained 1.90 per cent and topped the sectoral gainers list, helped by HUL's massive one-day move.

The stock was the top gainer in both Sensex and Nifty-50 indices on Wednesday. The stock has outperformed and delivered 13.39 per cent return (against Nifty-50’s -1.04 per cent) over the last one-month period and 25.33 per cent (against Nifty-50’s 12.05 per cent) return over the last one-year period.

There was no immediate trigger for the stock's rise, said an analyst.

The stock, however, has a positive outlook in the medium-term.

“In an overall challenging market environment HUL has delivered a resilient performance sustaining volume growth at a steady 5 per cent and healthy margin improvement,” the HUL management said in its commentary after tabling the third quarter results.

“Favourable base in the next few quarters, expected recovery in the demand environment from 2QFY21, synergies from the Glaxosmithkline Consumer Healthcare merger, price increase in soaps and lower crude costs are likely to boost earnings,” analysts at Motilal Oswal Financial Services said.

In the third quarter, HUL’s earnings before interest, tax, depreciation and amortisation grew at 19 per cent to Rs 2,445 crore.

Profit after tax before exceptional items for the quarter grew at 21 per cent to Rs 1,691 crore.

"The rise in palm oil prices may affect gross margins, but soft crude prices, judicious price increases and higher cost savings still provide a positive margin outlook," analyst from Emkay Global Financial Services said.