Shares of HUL fell as much as 2.8 per cent at its day's low of Rs 895,
extending its losses to the second day. The shares of the FMCG company
declined nearly 0.70 per cent on Thursday.
Shares of HUL had outperformed the market in the past one month, gaining over 12 per cent amid better-than-expected June rainfall. In comparison, the Nifty rose nearly 4 per cent.
HUL shares also benefited from defensive-buying, amid turmoil in global markets.
However, the weather department on Thursday said that there has been a drop in rainfall in July and almost all regions except the North-West have started registering negative precipitation.
According to the India Meteorological Department, from June 1 to July 8, the country registered an overall deficit rainfall of 4 per cent.
In a report brokerage Nomura said that specific parts of the HUL's portfolio, which are more rural facing, may continue to remain under pressure, where any revival in growth may still be some time away.
The rural growth is likely to remain slow as the effects of poor crops destroyed by the unseasonal rainfall are being felt, Nomura added.
Nomura has a reduce rating on HUL, with a target price of Rs 785.
On the overall FMCG sector, Nomura said volume growth performance has remained uneven due to weak urban demand and a slowing rural economy. However, it expects volume growth to show signs of a recovery in Q1 largely on the back of a revival in urban consumption.
Shares of HUL had outperformed the market in the past one month, gaining over 12 per cent amid better-than-expected June rainfall. In comparison, the Nifty rose nearly 4 per cent.
HUL shares also benefited from defensive-buying, amid turmoil in global markets.
However, the weather department on Thursday said that there has been a drop in rainfall in July and almost all regions except the North-West have started registering negative precipitation.
According to the India Meteorological Department, from June 1 to July 8, the country registered an overall deficit rainfall of 4 per cent.
In a report brokerage Nomura said that specific parts of the HUL's portfolio, which are more rural facing, may continue to remain under pressure, where any revival in growth may still be some time away.
The rural growth is likely to remain slow as the effects of poor crops destroyed by the unseasonal rainfall are being felt, Nomura added.
Nomura has a reduce rating on HUL, with a target price of Rs 785.
On the overall FMCG sector, Nomura said volume growth performance has remained uneven due to weak urban demand and a slowing rural economy. However, it expects volume growth to show signs of a recovery in Q1 largely on the back of a revival in urban consumption.
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