Hindustan Unilever trades inching closer to a 52-week high

In intra-day trade on Friday, Hindustan Unilever (HUL) gained over 2% to Rs 2,457.90 on the BSE, in an otherwise lacklustre market, on a bullish outlook. The fast-moving consumer goods (FMCG) company’s shares was trading around its 52-week high of Rs 2,504.30, set on April 13, 2021. For the fourth day in a row, it was trading higher. The S&P BSE Sensex, on the other hand, was down 0.66 percent at 51,994 points.

Hindustan Unilever has outpaced the market by gaining 4% in the last four days, compared to a 1.2 percent drop in the benchmark index.

With various areas of India gradually opening up, Hindustan Unilever’s management expects that the impact of the second COVID wave will have peaked in May 2021 and that conditions would gradually improve. Barring the appearance of a third COVID wave, the picture from June 2021 onwards remains optimistic.

An increase in GDP will almost certainly trickle down to consumer demand, accelerating penetration growth, premiumization, and the move to branded products in key FMCG categories. As a result, even while relative performance on profits growth seems to be worse, absolute FMCG earnings growth might rise in such an environment.

Given their relative demand stickiness, pricing power, and solid balance sheets, analysts at Jefferies noted in a consumer sector report that basic stocks have easily outperformed Nifty throughout periods of heightened uncertainty and volatility.

NEWS SOURCE

ALSO READ : For the 4th day in a row, Tips Industries has locked in a 5% upper circuit