Unilever shares gain post GSK acquisition, scripts 4th largest m-cap of 4 trillion

Last Updated: Wed, Dec 05, 2018 19:27 hrs
Hindustan Unilever

Unilever is D-street's fourth largest stock by market capitalisation. On Wednesday, the m-cap of Unilever stood at Rs 4 lakh crores, making it the fourth biggest company by m-cap.

Shares of FMCG major Hindustan Unilever (HUL) soared on Wednesday by a margin of 2.2%. The stock was quoting a price of Rs 1848.10. Tata Consultancy Services (TCS) leads the chart, with Rs 7.53 trillion market-cap, followed by Reliance Industries (Rs 7.32 trillion) and HDFC Bank (Rs 5.71 trillion).

HUL was up 6% in past three trading days, after the FMCG firm on Monday said it was merging GlaxoSmithKline (GSK) Consumer Healthcare with itself in a transaction worth Rs 317 billion, in the largest deal of the consumer goods space in the country.

Since October 12, 2018, post September quarter (Q2FY19) results, the stock of HUL has outperformed the market by surging 21%, gaining Rs 691 billion market-cap. On comparison, the Nifty 50 index was up 5.4% during the same period.

In its Q2FY19 results, the company has reported a growth of 11.1% at Rs 92,340 million as against Rs 83,090 million in the same quarter previous year. The volume growth for the quarter stood healthy at 10% with better growth in rural market on back of improved demand. All the key business segments of the company have reported early double digits growth in the quarter.

Brokerage firm Anand Rathi initiated a coverage on HUL with a 12-month target price of Rs 2,250 per share. “With HUL being largest FMCG Company with one of the largest footprint in terms of products and distribution network and its strategy to target volume growth primarily should drive health growth in medium term. The company has also entered into health drinks segment with proposed amalgamation of GSK Consumer business which we believe is value neutral while earnings accretive for HUL at current ratio. The deal at completion could add tentatively around Rs 4 in HUL’s EPS on post dilution shares,” the brokerage firm said in a note.