Hindustan Unilever Ltd (HUL) is a British-Dutch manufacturing company headquartered in Mumbai, India. Its (NSE: HINDUNILVR) products include foods, beverages, cleaning agents, personal care products, water purifiers, and consumer goods. HUL was established in 1933 as Lever Brothers and following the merger of constituent groups in 1956 was renamed Hindustan Lever Limited. The company was renamed in June 2007 as Hindustan Unilever Limited. As of 2019, Hindustan Unilever portfolio had 35 product brands in 20 categories and employs 18,000 employees with sales of Rs34,619 crores in 2017-18. In December 2018, HUL announced its acquisition of Glaxo Smithkline's India business for $3.8 billion in an all-equity merger deal with a 1:4.39 ratio. However, the integration of 3,800 employees of GSK remained uncertain as HUL stated there was no clause for retention of employees in the deal. In January 2019, HUL said that it expects to complete the merger with Glaxo Smith Kline Consumer Healthcare (GSKCH India) this year.
On the technical front, HINDUNILVR has higher highs and higher lows on the daily charts and is currently placed above the long-term EMAs in the daily frame. In the recent past, after clocking a high of 2457 levels, the stock has witnessed a correction to the current levels. At the current juncture, the stock has formed a base of around 2265 levels on the lower side and is all set to move higher. The overall chart structure of the counter looks bullish from current levels and is witnessing a bounce from the support zone around 61 levels. This may trigger a fresh round of buying which may take the stock towards Rs2,550 plus levels. The stock is currently performing in line with the broader markets indicating the inherent strength in the counter and is trading well above the major long-term support levels. On the Bollinger band (20,2), the stock price is trading above the mean with the upper band facing in the northward direction indicating the price likely to move higher. Analyzing the recent volume price action, the volumes have been encouraging in the recent up move indicating strong hands have started accumulating the stock at current levels. On the oscillator’s side, RSI (14) is trading in a comfortable zone of above 50 levels indicating the intact bullishness in the stock. We expect the counter to continue its outperformance in the coming trading days as well and may move towards Rs2,600 levels in the medium-term. Any correction towards the recent support levels of Rs2,325 levels may be utilized to average the positions.
Srinivas Krishnan Bobba, Deputy Manager (technical research analysis) Karvy Stockbroking Ltd