HUL Share Price Gets A Boost: BofA Hikes Target Price — Should You Buy, Sell Or Hold?

BofA has recently raised its target price for Hindustan Unilever Ltd, citing the parent company's growing focus on India and the group's aspiration to dominate Indian markets.

In a latest note, BofA has raised the target price from Rs 2,630 to Rs 2,840 while maintaining a 'Neutral' rating on the counter.

The brokerage firm highlighted the message from HUL's group company—Unilever Plc—at an investor conference, where the group's clear focus on India was spelt out.

"Transformation at Unilever, with India at the core," BofA noted in its report, adding that there is now significant emphasis on making sure HUL achieves volume growth in the domestic market.

India is a 'must-win' market for the group, and one of the most significant indicators of that has been the disproportionate M&A that is being directed to the India arm.

Earlier this year, HUL acquired a 90% stake in Minimalist for Rs 2,706 crore, marking one of the largest deals in the skincare industry.

However, BofA warns that execution could be key, though HUL's risk-reward factor appears to be quite balanced.

Jefferies has put out a similar note on HUL, highlighting the group company's focus on India and even noting Unilever CEO Fernando Fernandez's priorities at the investor conference.

Jefferies maintained a 'Buy' rating on HUL as well as a target price of Rs 3,000.

Fernandez's remark, 'Not a penny will be spent outside of the US & India,' reinforced Jefferies' bullish view on the FMCG giant.

The brokerage firm also noted that confidence in recently appointed CEO Priya Nair remains high.

Jefferies expects HUL to align with its parent's agenda and deliver high growth going forward.

It must be noted that HUL stands as one of the key beneficiaries in the FMCG sector following the GST Council's widespread changes to the Goods & Services Tax.

This tax rationalisation exercise – effective Sept 22 – is expected to directly enhance the affordability of daily essentials and stimulate consumer demand, particularly in rural and semi-urban markets. This could play into the hands of HUL.

Goldman Sachs and UBS believe the GST cut will be a major positive catalyst for the FMCG sector, with HUL emerging as one of the key beneficiaries.