Explore the diverse range of products, robust financial performance, and strategic acquisitions of Hindustan Unilever Limited (HUL). Discover why HUL stands out as a prominent player in India’s consumer goods industry.
Hindustan Unilever Limited (HUL) is a prominent constituent of the National Stock Exchange (NSE) and a distinguished member of the Nifty 50 index, reflecting its stature in India’s financial markets. Headquartered in Mumbai, HUL operates as a subsidiary of the esteemed British multinational Unilever. Its extensive product portfolio encompasses a wide array of consumer goods, including foods, beverages, cleaning agents, personal care items, and other fast-moving consumer goods (FMCGs). Established in 1931 as Hindustan Vanaspati Manufacturing Co., the company underwent several transformations, culminating in its rebranding as Hindustan Unilever Limited in June 2007, aligning itself with the global Unilever brand.
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Despite its financial prowess, HUL has encountered its fair share of challenges and controversies. Notable instances include the Kodaikanal mercury poisoning scandal, where allegations of toxic waste dumping raised environmental concerns, and a controversial advertising campaign targeting the Kumbh Mela pilgrimage site, which sparked public outcry over cultural insensitivity.
Undeterred by these challenges, HUL has maintained a robust presence in the market, boasting a diverse portfolio of over 50 product brands spanning 14 categories. With a workforce of 21,000 employees, the company has consistently delivered impressive financial performance, recording sales of ₹34,619 crores in FY2017–18, solidifying its position as a market leader.
In pursuit of continued growth and market expansion, HUL has undertaken strategic acquisitions, including the notable acquisition of GlaxoSmithKline India’s consumer business in December 2018. This strategic move, valued at US$3.8 billion, underscored HUL’s commitment to diversification and consolidation within the industry. Despite initial uncertainties surrounding the integration of GSK’s employees, HUL successfully completed the merger with GlaxoSmithKline Consumer Healthcare in April 2020, further bolstering its market presence.
Subsidiaries of Hindustan Unilever Limited
- Lakme Cosmetics
- Kwality wall’s
- Oziva
- Hindustan Unilever Foundation
- Lakme Lever Private Limited
- Ponds Exports Limited
- Unilever Nepal
- Jamnagar Properties Private Limited
- Unilever Europe business center B.V.
- Levindra Trust Limited
- Bhavishya Alliance Child Nutrition Initiatives
- Hindustan Trust Limited
- Levers Associated Trust Limited
- Daverashola Estates Private Limited
Share Holding Pattern of Hindustan Unilever Limited
These figures represent significant actions taken by a company that directly influence shareholder value. They signify material changes within the company and have an impact on its stakeholders:
- Promoter Shareholding: 61.90%
- FII (Foreign Institutional Investor) Shareholding: 12.67%
- DII (Domestic Institutional Investor) Shareholding: 8.27%
- MF (Mutual Fund) Shareholding: 5.01%
- Public Shareholding: 12.15%
Hindustan Unilever Limited (HUL) is a key player in the Indian consumer goods sector, and a thorough understanding of its financial performance is essential for investors seeking to make informed decisions. By analyzing the financial ratios from March 2021 to March 2024, we can gain valuable insights into HUL’s profitability, liquidity, solvency, efficiency, valuation, and growth prospects.
Fundamental Analysis of Hindustan Unilever Limited | ||||
Ratio | March 2024 | March 2023 | March 2022 | March 2021 |
Profitability Ratio | ||||
Gross Profit Margin | 50.42% | 45.94% | 50.93% | 51.07% |
Net Profit Margin | 16.72 | 16.84 | 17.22 | 17.29 |
Return on Equity (ROE) | 20.07% | 20.12% | 18.10% | 16.77% |
Liquidity Ratio | ||||
Current Ratio | 1.66 | 1.41 | 1.38 | 1.28 |
Quick Ratio (Acid-Test Ratio) | 1.34 | 1.06 | 1.01 | 0.958 |
Solvency Ratio | ||||
Debt to Equity Ratio | 0.0074 | 0.0253 | 0.0062 | 0.0274 |
Interest Coverage Ratio | 42.71 | 117.72 | 113.02 | 91.65 |
Efficient Ratio | ||||
Inventory Turnover Ratio | 7.19 | 7.60 | 6.71 | 7.22 |
Account Receivable Turnover Ratio | 20.37 | 19.68 | 19.74 | 19.45 |
Valuation Ratio | ||||
Price to earning Ratio (P/E) | 51.77 | 59.45 | 54.21 | 71.45 |
Price to Book Ratio (P/B) | 10.39 | 11.96 | 9.81 | 11.98 |
Growth Ratio | ||||
Earning per Share (EPS) Growth | 43.74 | 43.07 | 37.79 | 34.03 |
Revenue Growth (in Rs. Cr.) | 61,442.00 | 59,784.00 | 51,586.00 | 46,509.00 |
Profitability Ratio
Gross Profit Margin:
Hindustan Unilever Limited gross profit margin has fluctuated over the years, peaking at 51.07% in March 2021 and experiencing a slight decline to 50.42% in March 2024. Despite this decline, the gross profit margin remains relatively healthy, indicating efficient cost management and strong pricing power.
Net Profit Margin:
Hindustan Unilever Limited net profit margin has remained relatively stable, hovering around the mid to high teens over the past four years. This consistency suggests that HUL has been able to effectively control its expenses and generate consistent profits relative to its revenue.
Return on Equity (ROE):
Hindustan Unilever Limited ROE has shown a positive trend, increasing from 16.77% in March 2021 to 20.07% in March 2024. This indicates that HUL has been successful in generating higher returns for its shareholders over time, reflecting efficient utilization of shareholders’ equity.
Liquidity Ratio
Current Ratio:
Hindustan Unilever Limited current ratio has improved steadily over the years, indicating a strengthening liquidity position. With a current ratio of 1.66 in March 2024, HUL has sufficient current assets to cover its current liabilities, providing a buffer against short-term financial obligations.
Quick Ratio (Acid-Test Ratio):
Similarly, Hindustan Unilever Limited quick ratio has shown an upward trend, reaching 1.34 in March 2024. This suggests that HUL has an adequate level of liquid assets to meet its short-term liabilities without relying on inventory, highlighting its financial stability.
Solvency Ratio
Debt to Equity Ratio:
Hindustan Unilever Limited debt to equity ratio has remained consistently low, indicating a conservative capital structure with minimal reliance on debt financing. This bodes well for the company’s financial stability and ability to weather economic downturns.
Interest Coverage Ratio:
Hindustan Unilever Limited interest coverage ratio has exhibited volatility but generally remained above 1, indicating that the company is capable of servicing its interest obligations with its operating income. The significant increase in the interest coverage ratio from March 2021 to March 2023 reflects improved profitability and financial health.
Efficiency Ratio
Inventory Turnover Ratio:
Hindustan Unilever Limited inventory turnover ratio has fluctuated but remained relatively stable over the years, indicating efficient management of inventory levels. A higher inventory turnover ratio suggests that Hindustan Unilever Limited is able to sell its inventory quickly, reducing holding costs and improving cash flow.
Account Receivable Turnover Ratio:
Hindustan Unilever Limited accounts receivable turnover ratio has also remained consistent, indicating efficient credit management and timely collection of receivables. This ensures that HUL can convert its credit sales into cash efficiently, improving liquidity.
Valuation Ratio
Price to Earnings Ratio (P/E):
Hindustan Unilever Limited P/E ratio has shown fluctuations but generally remained at elevated levels, indicating investor confidence and expectations of future earnings growth. The decrease in P/E ratio from March 2021 to March 2024 suggests a potential undervaluation of HUL’s stock relative to its earnings.
Price to Book Ratio (P/B):
Hindustan Unilever Limited P/B ratio has fluctuated over the years, reflecting changes in market sentiment and investors’ perceptions of the company’s intrinsic value relative to its book value. The decrease in P/B ratio from March 2021 to March 2024 suggests a potential opportunity for value investors.
Growth Ratio
Earnings per Share (EPS) Growth:
Hindustan Unilever Limited EPS growth has shown a positive trend, indicating consistent earnings growth over the years. The increase in EPS growth from March 2021 to March 2024 reflects HUL’s ability to generate higher profits for its shareholders.
Revenue Growth:
Hindustan Unilever Limited revenue growth has also been impressive, with steady growth in revenue over the past four years. The increase in revenue from March 2021 to March 2024 reflects HUL’s strong market position and ability to capture growth opportunities in the consumer goods sector.
In conclusion, the fundamental analysis of Hindustan Unilever Limited highlights its strong financial performance, with consistent profitability, liquidity, solvency, efficiency, and growth prospects. Investors can use these insights to make informed decisions about investing in HUL’s stock, recognizing its potential for long-term value creation and capital appreciation.
Technical Analysis of Hindustan Unilever Limited
Technical analysis of Hindustan Unilever Limited involves evaluating price movements and trading volumes to forecast future price movements. Technical analysis depends on charts and statistical indicators. analysts use various techniques, such as trend analysis, chart patterns, and technical indicators like moving averages or relative strength index (RSI), to identify potential buying or selling opportunities for Hindustan Unilever Limited. The main goal of technical analysis of Hindustan Unilever Limited share price is to predict future price movements based on historical data and market psychology, helping investors make informed decisions about when to enter or exit trades. So, bellow we are explaining Various techniques as of 7th May 2024 for technical analysis of Hindustan Unilever Limited.
Price Action
Price action and price level of Hindustan Unilever Limited (As of 7th May 2024) | |||
Price action | Daily Timeframe | Weekly Timeframe | Monthly Timeframe |
Candlestick | Strong Bullish Candlestick | Supper Strong Bullish Candlestick | Bullish Candlestick |
Chart Pattern | Falling Wedge Pattern | Falling Wedge Pattern | Strong Consolidated Pattern |
Price Support Level | 2220-2240 | 2200-2210 | 2000-2050 |
Price Level | 2380 is Current price
| 52 weeks High 2769.65 | 52 weeks low 2172.05 |
Hindustan Unilever Limited (HUL) has exhibited intriguing price action and dynamics across different timeframes, offering valuable insights for investors and traders alike. Let’s delve into the details of the candlestick patterns, chart patterns, price support levels, and price levels to understand the potential trajectory of HUL’s stock.
Daily Timeframe
Candlestick:
On the daily timeframe, Hindustan Unilever Limited stock witnessed a strong bullish candlestick on 7th May, indicating aggressive buying pressure and a significant 6% price movement with high trading volume. This breakout suggests a bullish sentiment among investors, driving the stock price higher.
Chart Pattern:
The falling wedge pattern was activated as the stock decisively broke the 2240 resistance level with substantial volume. Following the breakout, the price retraced to retest the breakout level, indicating a potential continuation of the upward trend.
Price Support Level:
The price support level for HUL on the daily timeframe is identified between 2220-2240, indicating a range where buying interest is likely to emerge, providing support to the stock’s price.
Weekly Timeframe
Candlestick:
The weekly timeframe reveals a supper strong bullish candlestick formation, signaling a robust uptrend in the stock. Despite a doji formation on 15th April, suggesting a period of consolidation, the subsequent bullish candlesticks indicate a resumption of the upward rally.
Chart Pattern:
Similar to the daily timeframe, a falling wedge pattern is activated on the weekly chart, with a high probability of breaking the last lower high at 2450. This pattern suggests a potential breakout and continuation of the bullish momentum.
Price Support Level:
The weekly price support level for HUL is observed between 2200-2210, indicating a zone where buying interest could intensify, supporting the stock’s price during pullbacks.
Monthly Timeframe
Candlestick:
On the monthly timeframe, Hindustan Unilever Limited stock exhibits a bullish candlestick pattern, indicating a period of consolidation within a range since July 2021. This consolidation phase suggests accumulation by investors before a potential bullish breakout.
Chart Pattern:
A strong consolidated pattern is observed on the monthly chart, suggesting a buildup of momentum within the range. The high probability of a breakout indicates a potential bullish rally in the near future.
Price Support Level:
The monthly price support level for Hindustan Unilever Limited is identified between 2000-2050, indicating a critical zone where significant buying interest may emerge, providing a strong foundation for the stock’s price.
Price Levels
The current price of HUL stands at 2380, having corrected more than 25% from its 52-week high of 2769.65. This correction presents an opportunity for investors, as the stock is poised for a potential bullish upswing.
The 52-week high of 2769.65 and the 52-week low of 2172.05 provide important reference points for investors, highlighting the stock’s price range over the past year.
In conclusion, the price action and price levels analysis of Hindustan Unilever Limited across different timeframes suggest a bullish outlook, supported by strong candlestick patterns, chart formations, and price support levels. Investors can use this analysis to make informed decisions regarding entry and exit points, leveraging the potential upside momentum in HUL’s stock.
Indicators Use for Technical Analysis
Bolinger Band (BB):
Bolinger Band Price level in Hindustan Unilever Limited (As of 7th May 2024) | |||
| Upper Band | Median | Lower Band |
Bolinger Band | 2319.23 | 2245.40 | 2171.57 |
The Bollinger Bands provide valuable insights into the price volatility and potential support and resistance levels for Hindustan Unilever Limited (HUL) stock.
The upper band is currently at 2319.23, indicating an upward price momentum as the stock has crossed this level with significant volume. Moreover, HUL is consolidating above this upper band, suggesting potential bullish strength and continuation of the uptrend.
The median, or middle band, stands at 2245.40, serving as a crucial support level for HUL’s price action. Notably, the median band aligns closely with the exact support indicated by the daily candlestick pattern. This convergence reinforces the significance of the median band as a key level of price support.
At 2171.57, the lower band represents an important level of support derived from the weekly candlestick pattern. This lower band serves as a critical support level, indicating potential buying interest and a floor for HUL’s price action.
Moving Average (MA):
Moving Average price level in daily candlestick of Hindustan Unilever Limited (As of 7th May 2024) | ||
Moving Average | 100 Day | 200 Day |
Simple Moving Average (SMA) | 2404.82 | 2467.16 |
Exponential Moving Average (EMA) | 2366.53 | 2434.39 |
Simple Moving Average (SMA):
Currently at 2404.82, the 100-day SMA is projected to act as a crucial support level in the future. This indicates that if the stock experiences a pullback, the 100-day SMA is likely to provide support, potentially acting as a floor for the stock’s price.
Standing at 2467.16, the 200-day SMA is encountering slight resistance. However, if the ongoing rally in the stock continues, the 200-day SMA is expected to transition into a support level. This suggests that the SMA’s longer-term trend remains bullish, with potential for upward momentum.
Exponential Moving Average (EMA):
At 2366.53, the 100-day EMA has served as a support level after the price retraced towards the average line. This indicates that the EMA has acted as a stabilizing force, providing support during periods of price consolidation or retracement.
Currently at 2434.39, the 200-day EMA is facing slight resistance. However, similar to the 200-day SMA, if the upward rally persists, the 200-day EMA is likely to transform into a support level. This suggests that the EMA’s longer-term trend aligns with bullish momentum, potentially providing support for the stock’s price in the future.
Data Analysis
Volume Put Call Ratio of Hindustan Unilever Ltd
Volume Put Call Ratio of Hindustan Unilever Ltd. | ||||
Expiry Date | Put Total Contracts | Call Total Contracts | PCR Volume | Signal |
30/05/2024 | 15230.00 | 35443.00 | 0.430 | Bullish |
27/06/2024 | 281.00 | 613.00 | 0.458 | Bullish |
Analysing the volume put call ratio (PCR) provides insights into investor sentiment and potential market direction for Hindustan Unilever Ltd. (HUL) stock.
The data table includes two expiry dates: 30/05/2024 and 27/06/2024, representing different timeframes for options contracts.
These columns indicate the total number of put and call contracts traded for each expiry date, reflecting investor activity and market participation.
The PCR volume is calculated by dividing the total number of put contracts by the total number of call contracts. A PCR value below 1 suggests a bullish sentiment, indicating a higher volume of call contracts compared to put contracts.
Signal: Based on the PCR volume, a signal is generated to provide insights into market sentiment. A “Bullish” signal suggests optimism among investors, indicating a preference for call options over put options.
For the expiry date of 30/05/2024, the PCR volume is 0.430, signalling a bullish sentiment as the number of call contracts significantly outweighs the number of put contracts. Similarly, for the expiry date of 27/06/2024, the PCR volume is 0.458, further reinforcing the bullish outlook.
Conclusion
In conclusion, Hindustan Unilever Limited (HUL) is a strong player in India’s consumer goods market. Despite facing challenges, it has stayed resilient and kept up good financial performance.
Looking at its numbers, HUL seems stable and reliable. It’s been consistently making profits, managing its debts well, and turning inventory into sales efficiently. Plus, it’s been growing steadily over the years.
When we look at how people are trading its stock, there’s a positive vibe. More investors are betting on it to go up rather than down, which is a good sign.
So, if you’re thinking about investing, HUL could be a smart choice. Its solid performance and positive market sentiment make it a promising option for potential growth in your investment portfolio.
FAQs
- What is Hindustan Unilever Limited (HUL)?
Hindustan Unilever Limited (HUL) is a leading company in India’s consumer goods industry. It offers a wide range of products, including foods, beverages, cleaning agents, and personal care items.
- When was Hindustan Unilever Limited Established?
HUL was established in 1931 as Hindustan Vanaspati Manufacturing Co. It underwent several name changes before becoming Hindustan Unilever Limited in 2007.
- Who Owns Hindustan Unilever Limited?
Hindustan Unilever Limited is a subsidiary of the British multinational company Unilever.
- What Controversies has Hindustan Unilever Limited Faced?
Hindustan Unilever Limited has faced controversies, including environmental concerns over toxic waste dumping and criticism for insensitive advertising campaigns.
- How Many Products does Hindustan Unilever Limited Offer?
Hindustan Unilever Limited offers over 50 product brands across 14 categories, ranging from food and beverages to personal care and home care products.
- What is Hindustan Unilever Limited Financial Performance?
Hindustan Unilever Limited has recorded strong financial performance, with consistent profitability and revenue growth over the years.
- Has Hindustan Unilever Limited Acquired Other Companies?
Yes, Hindustan Unilever Limited has undertaken strategic acquisitions, including the acquisition of GlaxoSmithKline India’s consumer business in 2018.
- What is the Shareholding Pattern of Hindustan Unilever Limited?
The shareholding pattern of HUL includes promoter shareholding, foreign institutional investors (FIIs), domestic institutional investors (DIIs), mutual funds (MFs), and public shareholding.
- How Does Hindustan Unilever Limited Stock Perform?
Hindustan Unilever Limited stock performance has been generally positive, with fluctuations reflecting market trends and company news.
- Is Hindustan Unilever Limited a Good Investment Option?
Considering its strong market position, diverse product portfolio, and stable financial performance, Hindustan Unilever Limited can be a promising investment option for long-term growth and stability.
