HINDUSTAN UNILEVER LIMITED POSITIONAL TRADING

The stock for today is Hindustan Unilever Limited.

BUSINESS ANALYSIS

Hindustan Unilever is in the FMCG business comprising primarily of Home care, Beauty & Personal Care and Foods & refreshment segments.

The company has manufacturing facilities across the country and sells primarily in India.

The company earns 29% of the margins from the Beauty and Personal Care segment which is the most among its divisions.

Home Care segments gives the company a revenue of 29% among its total portfolio.

The company’s brands are available across 80 lakh plus stores across India.

Around 90% of all households in India use 1 or more of company’s branded products.

Now coming to the Financials of the company.

FINANCIAL ANALYSIS

The market capitalization of the stock is Rs. 582,944 Cr.

The price to earnings ratio of the stock is 71.3 which is greater than the industry price to earnings ratio of 59.3. The value of P/E is greater but that doesn’t mean the stock is underperforming.

The company has a great return on capital employed of 39.2% which definitely showcases the potential of the company and great growth curve.

The return on equity is 29.2% which is quite closer to the return on capital employed.

The company has a debt to equity ratio of ‘zero’ which indicates that the company does not have loans and they are free to use their cash flow for the company’s expansion.

The company is also paying a healthy dividend of 92.52%.

Based on the market capitalization, Hindustan Unilever Limited is at 1^st position and its competitor are no way near to them.

From the last 4 quarters (Jun 2020, Sep 2020, Dec 2020 & Mar 2021) the sales are increasing constantly. The operating profit is making record highs and the growth is evident from these results. The expenses are also increasing at the same time, but it is due to the increasing sales and the expansion it is showing.

The net profit is similarly rising as the operating profit.

The earnings per share value is Rs 9.30.

The year on year profit growth is also tremendous which predicts the bright future of the company.

In the year 2021, the reserves have increased to Rs 47,439 Cr from Rs 8,013 Cr in the year 2020 which shows the massive interest of investors into this company.

The share capital of the company has also increased to Rs 235 Cr in the year 2021.

Promoters have a holding of 61.90% till March 2021 quarter.

The FII’s have a 14.95% holding.

The DII’s have a 10.68% holding while only 12.47% is with the public.

The company is in safe hands and their growth is quite awesome.

TECHNICAL ANALYSIS

If we give a closer look on the chart in a daily timeframe, we would be able to see a formation of cup and handle pattern.

This pattern has a unique structure and a breakout is achieved by the stock. Retest in the resistance level has occurred so the chances of stock booming further is massive.

The pattern is formed and is set to move forward.

The current market price on 08^th July 2021 is Rs. 2,482 which would definitely vary in the upcoming future.

The high price of the stock in the last 1 year is Rs 2,534.

The above image shows the chart pattern.

DISCLAIMER:

For explaining the disclaimer we have mentioned it in the bottom of this page.