(Reuters) -India’s Hindustan Unilever (HUL) extended gains on Friday to climb as much as 8%, hitting a nine-month high, after it reported a higher first-quarter profit, with growth in revenue and sales volume pointing to a gradual earnings recovery.
HUL, which is home to brands such as Dove soap and Surf Excel detergent, has been under pressure from dull urban consumption trends for several quarters.
However, analysts see HUL’s results as reflective of a gradually easing environment, with its stock receiving two ratings upgrades and at least 17 price-target hikes since Thursday.
Its median target price from 39 analysts now stands at 2,607.50 rupees from 2,500 rupees a month earlier.
The company’s first-quarter volume growth was slightly better than estimated, noted brokerage Macquarie. “A gradual recovery of rural (demand) continued, while urban showed signs of a pickup.”
HUL was the top percentage gainer on the benchmark Nifty 50 index, flattish on the day, and among the top percentage boosts on the fast-moving consumer goods sub-index, which ticked 1.5% higher.
It closed 3.44% higher on Thursday after it announced its results, and was last trading 3% higher on Friday.
Brokerage HSBC said it liked HUL’s “volume-led growth strategy” amid intensifying competition.
“Improving revenue growth to support outperformance,” said JP Morgan.
HUL’s shares have gained 11% so far this year, compared to a 4.7% gain in the Nifty 50 and a 0.3% dip in the Nifty FMCG index.
(Reporting by Hritam Mukherjee in Bengaluru; Editing by Janane Venkatraman)
