Shares of Hindustan Unilever (HUL) fell during early trade on Friday after the FMCG major reported a 9.6 percent jump in its Q1FY22 net profit at Rs 2,061 crore as against Rs 1,881 crore in the corresponding quarter of last fiscal.

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The company’s revenue from operations rose 12.8 percent to Rs 11,915 crore from Rs 10,560 crore, YoY. HUL’s domestic volume growth during the quarter was at nine percent.

EBITDA in Q1FY22 increased 7.7 percent to Rs 2,847 crore from Rs 2,644 crore, while EBITDA margin weakened by 110 bps to 23.9 percent from 25 percent, YoY.

Read here: Hindustan Unilever Q1 net profit rises 9.6% to Rs 2,061 crore; volume growth at 9%

Here’s what brokerages have to say about HUL’s stock and its June quarter earnings:

CLSA

Hindustan Unilever’s 1QFY22 missed expectations with delayed integration of the nutrition business and weak margins. Management reported a focus on gaining share and protecting its consumer franchise.

Our positive stance has been based on likely demand acceleration and margin recovery, but both seem to be continuing, given weak externals. To capture near-term margin stress, we cut FY22 earnings estimates five percent. Due to a tax increase from 25.5 percent to 26 percent and a cut in other income, we cut earnings estimates by two percent.

We maintain a ‘buy’ rating and trim our target price from Rs 2,900 to Rs 2,850.

UBS

The on-the-ground disruption hurts the uplift. The consolidated numbers along with GSK volumes grew five percent YoY, while synergies materialise by CY21 end. The Q1 revenue growth was at 12.7 percent YoY, a shade lower than estimates. However, improvement in mobility should aid discretionary/out-of-home portfolio, UBS said.

It maintained a ‘buy’ rating with a target price of Rs 2,850 per share.

Goldman Sachs

Goldman Sachs feels that the company is likely to be a beneficiary of the re-open. It has a ‘neutral’ call on the stock with a target price of Rs 2,182 per share.

Citi

The Q1 was a miss, Citi said. It maintained a ‘buy’ rating on the stock and cut estimates by 2-6 percent. Citi has a target of Rs 2,710 per share.

Motilal Oswal

The company continues to strengthen the key drivers of its success in India over the last decade. After premiumisation in detergents led to strong growth in detergent sales and margin in the last decade, the Personal Wash and Dishwashing segments show considerable promise going forward.

The brokerage maintained a ‘buy’ rating with a target of Rs 2,840 per share.

At 11:25 am, the shares of Hindustan Unilever were trading 0.35 percent lower at Rs 2,370.35 apiece on the BSE.

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