HUL stock: Volumes and margins to improve on higher demand, price hikes

Analysts expect stable market demand seen in Q1FY19 to continue into the current quarter with rural growth outpacing that of urban

Hindustan Unilever has underperformed its peer index, the BSE FMCG,  in recent weeks correcting about 11 per cent as compared to the 6 per cent fall for the index. In addition to the worries on pricey valuations of the sector, the Street was worried about the ability of the company to maintain margins, given higher crude oil prices, a weak rupee and more importantly HUL’s ability to maintain volumes in view of recent price hikes. 

However, the management’s optimistic commentary last week helped assuage some of the Street’s concerns, helping the stock bounce back a bit. Even after the correction, the