Shares of Hindustan Unilever had risen more than two percent intraday and clocked an all-time high of Rs 2,825.40 on Monday, as investors bet on select stocks in the defensive sector.
Given the caution in the domestic market considering the recent rally in the benchmark indices, some market participants believe investing in defensives such as HUL would be a safe bet.
Today’s buying traction comes after investors booked profits on Friday following a 16-day gaining streak. So far in 2021, HUL’s shares have gained over 15 percent.
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Further, recent price hike, increased mobility and expectation of good rainfall in September has boosted sentiment for the stock lately, said an analyst from a domestic brokerage firm.
With the second wave of the pandemic subsiding, the mobility is normalising which will lead to demand recovery of out-of-home and discretionary products, said HDFC Securities in a note recently.
The fast-moving consumer goods companies are seeing a broad-based recovery from Q2FY22 and have resumed investments in product innovation, distribution expansion, cost and capital efficiencies, HDFC Securities added.
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Media reports said that the fast-moving consumer goods company has raised detergent prices by 11 percent in August to pass on higher raw material costs to consumers.
The price hike is seen limiting the hit to HUL’s profitability which is a positive.
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In the past three years, HUL’s scrip has generated a return of more than 78 percent whereas the benchmark BSE-Sensex has given nearly 53 percent return.
On Monday, Hindustan Unilever’s stock ended 0.6 percent higher at Rs 2,782 on the BSE.
(Edited by : Ajay Vaishnav)
First Published: IST