Why has Hindustan Unilever fallen over 30% from its peak price levels?

Hindustan Unilever shares have fallen by over 30% from recent peaks and the fall has been quite rapid. However, now the problems for HIL are starting to look a lot more deep-rooted and secular in nature as the price touches a 2-year low. Even during the 2020 pandemic, HUL was still a defensive bet, but that is not the case any longer.

A lot has changed before and during the Ukrainian war. HUL is gradually losing pricing power. It saw OPM under pressure in Q3 and in Q4 it could only get worse. The reason is a sharp spike in most inputs that are critical to HUL like crude oil, corn, palm oil, soya bean etc. It is a Catch-22 for HUL. It either loses profit margins or it loses loyal customers in a market that is becoming increasingly competitive.