The share price of FMCG major Hindustan Unilever declined 2.7 percent in the morning trade on December 18 after Credit Suisse cut its target price of the stock to Rs 2,150 from Rs 2,180 while maintaining a neutral rating.
The global brokerage house also reduced earnings estimates by 1-2 percent after the parent company Unilever cut its growth guidance, highlighting India slowdown as a key factor.
"The growth guidance cut implies revenue growth below 5 percent and volume growth of around 3 percent in Q3. The company may deliver earnings growth via cut in advertising spends and other savings," Credit Suisse said.
Potential sale of GSK's 5.7 percent stake after the merger in Q4 is also an overhang on the stock.
The Economic Times recently said that GlaxoSmithKline (GSK) was planning to sell its stake in Hindustan Unilever (HUL) in 'tranches' by early 2020. The move follows GlaxoSmithKline Consumer Healthcare’s December 3, 2018 decision to merge with the Indian unit of Unilever.
The National Company Law Tribunal (NCLT) bench in Chandigarh was expected to approve the HUL and GSK Consumer merger by December-end, the report said.
The stock was quoting at Rs 1,915.30, down Rs 49.15, or 2.50 percent, on the BSE at 1042 hours.
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