InvestorQ : is it right time to invest in HUL?
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is it right time to invest in HUL?

Answer
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11 months ago


I suppose you are talking about Hindustan Unilever. The stock has had a fabulous run in the last two years as it has benefited from better consumer demand, lower GST rates on food products as well as a general improvement in the sentiments surrounding the FMCG stocks. The stock is currently quoting around the Rs.2100 mark although it does quote at a fairly rich P/E ratio of close to 69. There have been some concerns on the stock over the overall slowdown in consumption, especially rural consumption.

The way you should approach the stock is to keep accumulating it on dips. At the current P/E, it is best to make the best of dips so that your average acquisition P/E comes down. It still remains the best play on the FMCG space with food focus but valuations are an issue especially considering that the consumption slowdown is real and rural consumption is clearly under pressure. The big story could be that once the company tweaks its logistics networks post the GST implementation, the actual logistic and efficiency benefits will kick in.