July 17 (Bloomberg) -- Hindustan Unilever Ltd., India’s biggest consumer goods company, surged 10 percent to a record, leading a rally among local peers.
The stock rose 61.95 rupees to 685.05 rupees in Mumbai trading, and was the biggest gainer on the benchmark S&P BSE Sensex index. Dabur India Ltd. added 4.2 percent to 165.65 rupees, while ITC Ltd., Asia’s second-largest maker of cigarettes by market value, rose 2.3 percent to 368.35 rupee.
Some investors may be switching to consumer stocks from sectors like banking and financial services, which are more likely to be hurt by slowing economic growth, said Suniil Pachisia, vice president at Pratibhuti Viniyog Ltd. Two weeks ago, parent Unilever closed its offer to buy back shares from investors at 600 rupees apiece in a failed bid to raise its stake in the unit to 75 percent.
“The shares are a darling among investors and that’s one reason why the parent’s buyback offer failed to meet its target,” Alex Mathews, head of research at Geojit BNP Paribas Financial Services Ltd. said. “In uncertain times, Hindustan Unilever has been a great defensive stock.”
The company doesn’t comment on stock price movements, spokesman Prasad Pradhan said when contacted on his phone.
The London- and Rotterdam-based Unilever ended up holding about two-thirds of the Indian unit after the share offer as some investors chose not to sell due to a tax burden and the lack of alternative investment opportunities in the consumer sector, Abhijeet Kundu, an analyst at Antique Stock Broking Ltd. in Mumbai, said in an interview.
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