Hindustan Unilever shares registered mild gains on Tuesday to approach a record high registered last week after sources said the fast-moving consumer goods major had hiked the prices of some of its products. The HUL stock rose as much as one percent to Rs 2,808 on BSE, extending gains to a second straight day.
At 1:10 pm, Hindustan Unilever shares traded with a gain of 0.43 percent at Rs 2,791.50 on the bourse, outperforming the headline Sensex index, which was up 0.28 percent. HUL's market capitalisation is nearing the Rs 6.56 lakh crore mark.
The stock was within a stone's throw from a record high touched last week, which helped the company take its market value above the Rs 6.5 lakh crore level for the first time.
HUL hiked the price of detergents and soaps by 3.5-14 percent while reducing the grammage of the products' small packs, sources told CNBC-TV18.
They said the company increased the price of Wheel detergent powder by 3.5 percent for the one kg and 500 gm packs, and that of the easy wash variant of Surf Excel to Rs 114 from Rs 100 for the one-kg pack.
The company also increased the price of Rin to Rs 82 from Rs 77 for the one kg pack, and to Rs 40 from Rs 37 for the 500 grams pack.
In the soap segment, the price of Lux was raised by 8-12 percent, and Lifebuoy by eight percent. The company also reduced the grammage for small packs.
HUL did not respond to CNBC-TV18’s query on the price hikes.
The development is positive for HUL as it will likely boost its profitability, Varun Singh, FMCG and Retail Analyst at Idbi Capital Markets, told CNBCTV18.com.
Hindustan Unilever is one of his top picks, Singh said.
Hindustan Unilever shares have risen more than 16 percent so far in 2021, close behind the nearly 18 percent return of the sectoral Nifty FMCG index, which tracks stocks of ITC, Marico, Tata Consumer, Nestle and Britannia, besides HUL.
The headline Nifty50 index has returned 24 percent on a year-to-date basis.
"However, in the value segment, we expect Godrej Consumer Products to gain market share in soaps... Historically, Godrej Consumer has always benefited in the soaps portfolio during inflationary times due to its value positioning," added Singh of IDBI Capital.