Why HUL, Britannia shares rose up to 5% today

Shares of Hindustan Unilever Ltd (HUL) rose over 4 per cent today amid a rally in the broader market. The stock rose amid a fall in global crude palm oil prices. Crude palm oil is one of the key raw materials for HUL.

HUL stock rose 4.48 per cent to Rs 2,509 against the previous close of Rs 2,401 on BSE. The large-cap stock was among the top Sensex and Nifty gainers today. It ended 4.01 per cent higher at Rs 2,497.

On Nifty, the stock hit an intraday high of Rs 2,506.20, rising 4.36 per cent against the previous close of Rs 2,401.50.

The large-cap stock is trading higher than 5-day, 20-day, 50-day, 100-day and 200-day moving averages.

In a year, the stock has gained nearly 1 per cent and risen 5.48 per cent in 2022.

However, the stock has gained 9.19 per cent in a month.

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Total 2.63 lakh shares of the firm changed hands amounting to a turnover of Rs 64.70 crore on BSE. Market cap of the firm rose to Rs 5.86 lakh crore on BSE.

Shares of another FMCG major Britannia Industries ended 4.72 per cent higher at Rs 3,829 against the previous close of Rs 3,657.30. The stock climbed 5 per cent intraday to Rs 3,840 on BSE.

The firm will also become a beneficiary of the fall of crude palm oil prices since it's a key raw material in the company's manufacturing process.

Here's a look at what experts said on the effect of fall in crude palm oil prices on HUL and Britannia stocks.

Arijit Malakar, Head of Research - Retail, Ashika Group

"Global crude palm oil prices continued to decline and on international market, crude palm oil price declined by more than 35 per cent in the past few weeks on the back of resumption of exports from Indonesia as well as concerns over global demand. Palm oil prices are currently trading near their six-month lows owing to high inventory in the Indonesian market and key consumers such as India and Pakistan delaying imports. Crude palm oil is one of the key raw materials for Hindustan Unilever. Thus, a continuous decline in palm oil price will have a positive impact on its margins from Q3FY23 onwards and perhaps the stock has started factoring this positive."

Manoj Dalmia, Founder and Director, Proficient Equities

"Hindustan Unilever has broken a major resistance area, as well as the crude and palm oil prices, fell down. Palm oil prices are currently trading near their six-month lows. A sharp fall in prices of crude palm oil is good for domestic FMCG manufacturers as it is a critical raw material. HUL can be picked up for short-term gains. It can be bought at Rs 2,443 with a target price of Rs 2,835. One should maintain stop loss of Rs 2,360."

Ravi Singhal, Vice Chairman, GCL Securities Limited

"As we can see, the prices of crude oil, palm oil, coffee, and sugar have dropped significantly from their highs, allowing them to increase their margins. On the other hand, as the monsoon season begins, rural demand will remain stable."

Ravi Singh, Vice President and Head of Research, Share India

"The continuous fall in international crude palm oil prices on the back of resumption of exports from Indonesia and weak demand is benefiting the Indian consumer goods companies. HUL is gaining momentum on technical setup and the surge in volumes will keep the bullish pace intact. The stock may touch the levels of Rs 2,650 in the near term."