HINDUNILVR - Investment Analysis: Buy Signal or Bull Trap?
Back to ListInvestment Rating: 3.9
| Stock Code | HINDUNILVR | Market Cap | 5,56,994 Cr. | Current Price | 2,371 ₹ | High / Low | 2,660 ₹ |
| Stock P/E | 53.0 | Book Value | 208 ₹ | Dividend Yield | 1.81 % | ROCE | 27.6 % |
| ROE | 20.6 % | Face Value | 1.00 ₹ | DMA 50 | 2,359 ₹ | DMA 200 | 2,356 ₹ |
| Chg in FII Hold | -0.08 % | Chg in DII Hold | 0.06 % | PAT Qtr | 2,551 Cr. | PAT Prev Qtr | 2,839 Cr. |
| RSI | 51.5 | MACD | 5.92 | Volume | 12,78,762 | Avg Vol 1Wk | 14,70,332 |
| Low price | 2,044 ₹ | High price | 2,660 ₹ | PEG Ratio | 9.98 | Debt to equity | 0.03 |
| 52w Index | 53.1 % | Qtr Profit Var | -2.79 % | EPS | 46.5 ₹ | Industry PE | 46.9 |
📊 Analysis: Hindustan Unilever (HINDUNILVR) is a fundamentally strong FMCG giant with high ROE (20.6%) and ROCE (27.6%), supported by a debt-light balance sheet (0.03). However, valuations are stretched with a P/E of 53.0 compared to industry average of 46.9, and a high PEG ratio (9.98) indicates expensive growth. Dividend yield (1.81%) provides modest income support. Current price (₹2,371) is near both 50 DMA (₹2,359) and 200 DMA (₹2,356), showing consolidation. RSI (51.5) suggests neutral conditions, while MACD (5.92) indicates mild bullish sentiment. The ideal entry zone lies between ₹2,250–₹2,300 for long-term investors. If already holding, maintain positions for 3–5 years, leveraging strong brand power and dividends, but consider partial profit booking near ₹2,600–₹2,660 resistance levels.
✅ Positive
- Strong ROE (20.6%) and ROCE (27.6%) highlight efficient capital use.
- Debt-to-equity ratio (0.03) ensures financial stability.
- Dividend yield (1.81%) supports long-term holding.
- EPS at ₹46.5 provides a solid earnings base.
⚠️ Limitation
- High P/E (53.0) compared to industry average (46.9).
- PEG ratio (9.98) signals overvaluation relative to growth.
- Quarterly PAT declined (₹2,551 Cr vs ₹2,839 Cr), showing margin pressure.
📉 Company Negative News
- Decline in quarterly profit (-2.79% variation).
- FII holdings decreased (-0.08%), reflecting cautious foreign sentiment.
📈 Company Positive News
- DII holdings increased (+0.06%), showing domestic institutional support.
- MACD (5.92) indicates mild bullish momentum.
- Strong market cap (₹5.56 lakh Cr) reflects industry leadership.
🏭 Industry
- FMCG sector benefits from consistent demand and defensive nature.
- Industry PE (46.9) is lower than HINDUNILVR, suggesting peers may offer better valuations.
🔎 Conclusion
HINDUNILVR is a fundamentally strong FMCG leader with stable profitability and low debt, making it a decent long-term candidate. However, valuations are stretched, so ideal entry is around ₹2,250–₹2,300. Existing holders should maintain positions for 3–5 years, leveraging dividends and brand strength, while booking profits near ₹2,600–₹2,660 resistance levels.
Would you like me to extend this with a peer benchmarking overlay (Nestle India, Dabur, ITC) so you can compare Hindustan Unilever’s valuation and profitability against its closest FMCG peers?