Buy This FMCG Stock For 20% Upside, 1700% Dividend, Ex-Dividend Date 1 Week Away: Sharekhan

Sharekhan has given buy rating to Hindustan Unilever Limited with a target price of Rs 3005. If you buy the stock now, it can fetch you a potential return of up to 20%. The company declared 1700% interim dividend on October 7, 2022. The company has a history of paying whopping dividend.

Earlier this year in March, it announced an equity dividend of 3400% or Rs 34 per share. If the current share price of Rs 2507 is taken into consideration it has a dividend yield of 1.36%. Check key takeaways pertaining to dividend, stock outlook, and about the company, among others below:

1. HUL Stock Outlook

The current market price of HUL is Rs 2507 apiece with 52-week high at Rs 2733 apiece and 52-week low at Rs 1901 apiece, respectively. The company has a market capitalisation of Rs 5,89,042.53 crore.

2. HUL Interim Dividend

The board of directors of HUL stated, "declared an interim dividend of Rs. 17/- per equity share of face value of Re. 1/- each for the financial year ending 31st March, 2023. As intimated vide our letter dated 7th October, 2022, the record date for the purpose of determining the entitlement of the shareholders for the interim dividend has been fixed as 2nd November, 2022, and dividend will be paid to the shareholders on or after 17th November, 2022."

The ex-dividend date is November 1, 2022 and record date is November 2, 2022.

3. HUL Key Positives/Key Negatives

Key Positives: Sales volume growth stood at 4% vs. industry volume decline of mid-single digit. HUL gained market share in over 75% of product portfolio across categories and across key price points. Home care business registered growth of 34%; despite of higher pricing in fabric wash segment registered doubledigit volume growth. EBIT margins of food & refreshment business improved by 150 bps to 19.8% led by a better mix with foods business growth in double digits.

Key Negatives: Raw material inflation led to a 580 bps y-o-y decline in gross margins to 45.8%.

4. Valuation

According to Sharekhan, "Retain Buy with a revised price target of Rs. 3,005: HUL is focusing on premiumisation, market development to improve penetration in key categories and digitalisation to drive consistent double-digit earnings growth in the medium to long term. Strategy is also help it post consistent improvement in market share (in 75% of the product portfolio). HUL is currently trading at 64x/54x its FY2023E/24E earnings. Leading position in some high-penetrated categories, thrust on innovation and market development to remain competitive and drive consistent earnings growth makes it good pick from a long-term perspective. Any uptick in rural demand might help company improve the volume growth in the quarters ahead. We maintain a Buy on the stock with a revised price target of Rs. 3,005 (rolling it over October 2024 earnings)."

5. About HUL

HUL is India's largest FMCG company with a presence of nearly 90 years in the country and a strong portfolio in the homecare and beauty and personal care categories.

The company is a subsidiary of Unilever Plc (that holds a 62% stake in HUL), the world's largest consumer goods company present across 190 countries.

With over 50 brands spanning 15 distinct categories such as personal wash, fabric wash, skin care, hair care, oral care, deodorants, colour cosmetics, beverages, ice creams, frozen desserts, and water purifiers, HUL is part of the everyday life of millions of consumers across India.

Disclaimer

The stock has been picked from the brokerage report of Sharekhan. Greynium Information Technologies, the Author, and the respective Brokerage House are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to check with certified experts before taking any investment decision.