FMCG Sector Exploration

When we talk about the FMCG sector, one stock which comes to our mind is Hindustan Unilever (HUL). HUL over a period of time has earned a reputation in giving the best of daily use products to the world. So today we are going to talk about one of the top stocks in FMCG sector in our country- Hindustan Unilever (HUL).

HUL currently trades at a level of Rs 1993. Technically when we see the chart of this stock of last 7 years, it has shown a peculiar trend which is as follows-It shows an uptrend then it falls for some time (showing a retracement) and then goes up and makes a fresh lifetime high. This trend has been continued in this stock since many years. Currently when the stock trades at Rs 1993,it is a part of a retracement and seeing the previous chart movement we can very well expect the stock can very soon cross its previous lifetime high levels of 2859.3 and make a fresh lifetime high. So technically stock looks bullish because recovery has started in the market post the War conflicts we saw in January 2022 and technically it is well placed and bouncing from a strong support.

Now when we see the stock fundamentally, it has been a virtually debt free stock since many years, particularly being absolute debt free in the years 2011,2012,2018 and 2020.

Market capitalisation wise it is the biggest player in the manufacturing of FMCG products in our country leaving behind the likes of Dabur, etc. and also it is among the top 5 stocks of the country based on market capitalisation. OPM of this stock was around 14% in 2011 whereas recently the OPM has gone up to 25% which is again a very good sign. A healthy dividend pay-out in the range of 80-100% has been maintained by the company. Majority of the shareholding is with the promoters since last many years (Promoter holding being 61.90%). FIIs and DIIs contribute to around 24% of the holding leaving the rest 12% to public investors. Since the majority holding is with the big players, the stock looks safe in their hands because a big player or a promoter stick onto a stock only when they see great growth prospect. So, all in all stock looks good with a positional view where if everything goes according to the developments in the stock, you can very soon see the stocks reaching the levels of at least Rs 2900 and above in the coming few months.