In 2024, the stocks of ITC Ltd and Hindustan Unilever Ltd (HUL) have captured investors’ attention. Both companies, prominent players in the FMCG (Fast-Moving Consumer Goods) sector, reached
In 2024, the stocks of ITC Ltd and Hindustan Unilever Ltd (HUL) have captured investors’ attention. Both companies, prominent players in the FMCG (Fast-Moving Consumer Goods) sector, reached their all-time highs in September. On September 27, ITC shares hit a record high of ₹528.55, while HUL stocks touched ₹3034.50 on September 23, 2024. Despite these record highs, both stocks have experienced mixed performances in recent months. Let’s explore the price targets, returns, technical indicators, and future expectations for ITC and HUL in 2025.
Over the past three years, ITC has delivered impressive returns, outperforming its peer, HUL. ITC’s stock has gained a significant 115% over the last three years and 40% in the past two years. In contrast, HUL has struggled, with a 6.32% increase in the last three years and a decline of 11.20% in the past two years.
In 2024, ITC has provided relatively modest returns of 0.56%, while HUL’s stock has underperformed with a decrease of 10.56%. Notably, both companies’ stocks exhibited low volatility over the past year, with ITC having a beta of 0.6 and HUL a beta of 0.3, indicating lower market risk compared to the broader market.
When it comes to valuation, ITC and HUL have differing price-to-earnings (P/E) ratios. ITC’s P/E ratio stands at 28.62, which is higher than the industry average, indicating that the stock is priced relatively expensively. However, it is important to note that ITC’s performance has outpaced expectations, suggesting its higher valuation might be justified.
In comparison, HUL’s P/E ratio of 54.23 is notably higher than the industry average of 60.8, yet its stock has significantly lagged behind ITC in terms of returns.
Over the past six months, ITC has been more stable compared to HUL. ITC has gained 9.58% during this period, despite a 7.33% drop over the last three months. On the other hand, HUL has seen a sharp 17.56% decline over three months and a 4.55% dip in the last six months.
As of the latest trading session, ITC shares are priced at ₹469.85 on BSE, with a market capitalization of ₹5.87 lakh crore. Meanwhile, HUL shares are trading at ₹2365, with a market capitalization of ₹5.86 lakh crore.
Technical analysis reveals interesting insights into the current state of ITC and HUL stocks.
For ITC, the Relative Strength Index (RSI) stands at 46.4, suggesting that the stock is neither overbought nor oversold. ITC is currently trading higher than its 5-day, 10-day, and 200-day moving averages but below its 20-day, 30-day, 50-day, 100-day, and 150-day moving averages. This indicates mixed technical momentum, with potential support at lower levels.
In contrast, HUL’s RSI is at 36.1, which is closer to the oversold zone, signaling potential for a reversal. HUL shares are trading below most of their moving averages, suggesting a bearish short-term outlook. However, the stock may find support at these levels if buying interest returns.
ITC: A Strong Buy for 2025
Analysts are relatively bullish on ITC for the short to medium term.
Mileen Vasudeo, Senior Technical Analyst at Arihant Capital Markets, recommends a buy call for ITC with a target price of ₹510-530. He suggests setting a stop loss at ₹450, noting that ITC’s stock has shown support at the 200-day simple moving average (SMA) at ₹259 and is showing positive momentum indicators.
Macquarie has a price target of ₹560, citing strong growth potential. The brokerage also notes that the cigarette segment’s stable volume growth and market share gains in organized players due to government action on illicit cigarettes should continue to benefit ITC.
ICICI Securities has recommended ITC as a preferred pick, supported by its stable growth and the resilience of its FMCG segment, even though commodity inflation may weigh on margins.
HUL: Mixed Sentiments, Cautious Optimism
While analysts have varied views on HUL, there is cautious optimism about its future performance.
Morgan Stanley maintains an underweight stance on HUL, with a target price of ₹2110. Despite appreciating the company’s strategic shift toward a more aggressive management style, it believes that achieving growth will take time, particularly in the beauty and wellbeing segments.
Motilal Oswal has a buy call on HUL with a target price of ₹3100, based on long-term growth potential. The brokerage expects HUL to achieve competitive turnover growth driven by volume, premiumization, and portfolio transformation in beauty & wellbeing and food & nutrition.
Emkay Global has slightly lowered its target price to ₹2950 from ₹3200, maintaining a buy call. The firm expects HUL’s growth to outperform the market but emphasizes the importance of execution in realizing its full potential.
Prabhudas Lilladher’s Shiju Koothupalakkal highlights the stock’s potential for a reversal, with an upward target of ₹2780, provided it breaks above the 200-period moving average at ₹2540.
As we move into 2025, both ITC and HUL are poised for different trajectories. ITC’s strong growth in the last few years positions it well for continued success, particularly in its FMCG and cigarette segments. Analysts are bullish on the stock, and its attractive valuation could make it a favorable pick for investors in the near term.
On the other hand, while HUL faces challenges in the short term, its long-term growth strategy, especially in the beauty & wellbeing and food & nutrition segments, could drive future performance. Investors may want to monitor the company’s progress in executing its strategy and the stock’s price movement over the next few months.
Both stocks have their merits, and while ITC appears to be the better short-term bet, HUL remains a solid choice for long-term investors willing to ride out the volatility.
Disclaimer: The content provided in this blog is for informational purposes only and does not constitute investment advice. Please consult with a certified financial advisor before making any investment decisions.
Source: Business Today
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