The stock of Hindustan Unilever Ltd (HUL) along with other FMCG players has been a laggard in the past year.
With negative capital appreciation and nominal dividends, the HUL stock has not been able to beat even the traditional FD Returns.
This trend has led to retail and institutional investors pulling money out of the stock (along with other FMCG players like ITC, etc.)
Now coming to the possible reasons for the same
- Competition from new age listed & un-listed companies in the Home Care (HC), Beauty & Personal Care (BPC) and Foods & refreshment (F&R) segment
- High valuation
- Low than expected Rural Demand
- Lower than expected growth on a higher base
- Inflation in raw material prices
- Price cuts in some product segments to meet the competition
Going ahead, the company has a lot of positives to look forward to
- Refocus on rural-economy by the government through spending post June 2024
- Softening of raw materials prices
- Hiving off of low margin business like ice creams (Link)
- Bringing premium products into the market
- Using Social Media platform etc. to appeal to new customers
Owing to these reasons, we can see the return of interest in buying into FMCG stocks
As of writing of this post, the stock has already crossed INR 2300/share and is poised to position itself to capitalize on the demand post a normal monsoon from June 2024.
Please note – this is not a recommendation. Do you research before investing your hard earned money.
Hope this helps
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Lateral Thinking 
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