Hindustan Unilever Ltd (HUL), one of India’s leading consumer goods companies, is expected to report a robust performance for the June quarter, with an anticipated 12-14% year-on-year (YoY) increase in net profit. This growth is likely to be driven by an 8-9% rise in sales, as the company benefits from a correction in input prices and a favorable product mix following calibrated price hikes. Furthermore, the underlying volume growth (UVG) for the quarter is expected to surpass 5%, indicating positive momentum in sales.
On a standalone basis, Kotak Institutional Equities predicts a YoY rise of 13.6% in HUL’s net profit, reaching approximately Rs 2,599.80 crore, compared to Rs 2,289 crore in the same quarter of the previous year. The revenue is projected to rise by 9.1% YoY, reaching Rs 15,573.60 crore, though it would be slightly lower than the 10.6% YoY growth seen in the March quarter. However, the underlying volume growth is estimated to be around 5.5% YoY, which reflects an improvement from the previous quarters.
The analysis also sheds light on the expected performance of HUL’s product segments. The Home Care (HC) segment is projected to experience a moderate growth of 12%, compared to 18.7% in the previous quarter, partly due to price cuts in the laundry portfolio. The Beauty and Personal Care (BPC) segment is expected to witness an 8.5% YoY growth, down from 10.1% in the previous quarter, mainly due to price cuts in soaps. On the other hand, the Foods & Refreshment (F&R) segment is likely to see an improvement with a 7% YoY growth, compared to 2.6% in the previous quarter.
The report also points out that inflationary pressures could have an impact on HUL’s demand in the Home and Personal Care (HFD) segment, particularly in dairy and tea products, where consumers may resort to downtrading. Additionally, the company’s decision to implement price cuts in laundry and skin cleansing products may lead to lower channel inventory, potentially impacting HUL’s wholesale sales to some extent.
Despite these challenges, the company’s Ebitda (earnings before interest, taxes, depreciation, and amortization) margin is expected to improve to 23.5% for the June quarter, compared to 23.3% in both the March quarter and the year-ago quarter. This reflects HUL’s ability to manage costs and maintain profitability even amidst varying market conditions.
Hindustan Unilever Ltd, a subsidiary of Unilever and a key player in the Indian consumer goods market, is anticipated to continue its growth trajectory in the June quarter. The company’s strategies, including calibrated price hikes and favorable product mix adjustments, seem to have positively impacted its financial performance. Investors and stakeholders are closely monitoring the results announcement to gain insights into the company’s overall performance and future prospects.
As HUL prepares to unveil its quarterly results, market analysts and investors are eagerly awaiting further details to assess the company’s performance in different product categories and its ability to navigate through the prevailing economic conditions. The results will likely influence market sentiment and may have implications for the consumer goods sector as a whole.