Bajaj Auto, HUL: What should investors do with these stocks post q4 results? Here is what brokerages suggest

Shares of Bajaj Auto dropped over 2%, while HUL gained around 5% in the early trade on Thursday, a day after they declared their q4 results on Wednesday. Leading two-wheeler manufacturer Bajaj Auto has reported a 2 per cent decline in consolidated net profit for the fourth quarter ended March 2022, while FMCG major Hindustan Unilever Ltd on Wednesday reported a 5.34 per cent increase in its net profit to Rs 2,307 crore in the March quarter.  

Meanwhile, brokerages have maintained a mixed stance on these stocks after q4 earnings. Here is what they have to say on Bajaj Auto and HUL.  

Bajaj Auto:  

Brokerage house Motilal Oswal maintained a neutral rating on the automotive manufacturer saying the company had strong beat due to deferral of RM cost impact and favorable INR/Mix. "Volumes fell by 16.5% YoY, whereas realizations grew ~11% to INR81.3k/unit in 4QFY22 (est. INR78k), driven by price hikes and favorable INR/mix," it said.  

Global brokerage firm Jefferies maintained a buy call with a target price of Rs 4,000 per share on auto manufacturer stock, saying the company attributes strong margin expansion to price hikes.  "EBITDA and net profit fell 8-10% year on year but were 26-30% above estimates. Also, volume fell 17% YoY, but ASP rose higher-than-expected by 6% sequentially," it highlighted.  

Sying 80% payout to shareholders truly impressive, LKP Securities says the stock looks  attractive at 15x FY24E earnings. "We maintain our BUY rating on the stock with a higher target price of Rs4,395 (at 17x FY24E earnings) on improving volume and margins expectations," it said.

HUL 

Motilal Oswal sees an upside of 17% on the FMCG stock at Wednesday's closing price of the share at Rs 2144 . It was of the view that though near-term headwinds temper earnings expectations, however, 4QFY22 results were above expectations. It feels positive factors can emerge from rural recovery fueled good Rabi crop, good monsoon, and sustained agri commodity inflation. "Maintain BUY with a Target price of Rs 2,500," it said.  

As per ICICI Securities, HUL's flat volume performance in 4QFY22 was a beat. But the brokerage is firm that HUL continues to deliver well on steady premiumisation and category development, enhance digital capabilities including e-commerce salience, D2C brands and improved reach (Shikhar) – digital demand capture has 20%+ salience.  

"As price-lever will have its limitation on guarding margins, the intent is to further drive cost efficiencies. Balance between cost rationalisation and investing for the future will be (again) key. Maintain ADD," said the brokerage.  

At 12.45 pm, shares of Bajaj Auto were trading one and half per cent lower to Rs 3850.15 per share, HUL shares were up 4% to Rs 2229.90 a share on the BSE.