Hindustan Unilever Ltd Stock price rose 0.37 percent after gaining as much as 1.3 percent ahead of its September quarter results announcement.
Here’s what analysts tracked by Bloomberg expect the company to report on a yearly basis.
- 1. Revenue seen 5.6 percent higher at Rs 9,752 crore.
- 2. Ebitda seen 8.5 percent higher at Rs 2,191 crore.
- 3. Margin seen at 22.5 percent versus 21.9 percent.
- 4. Net profit seen 17 percent at Rs 1,788 crore.
FMCG major Hindustan Unilever (HUL), on October 14, is expected to report double digit growth in September quarter earnings driven by strong operating performance. Revenue is likely to increase around 7-8 percent over a year-ago period.
The stock gained 11 percent during the quarter ended September 2019 and rallied 12 percent year-to-date.
Motilal Oswal expects HUL’s revenue to grow 7 percent YoY, with underlying domestic volume growth of 6 percent in Q2FY20 against 10 percent growth in Q2FY19 while Kotak sees 8 percent revenue growth in the domestic FMCG business led by 5.5 percent underlying volume growth and 2.5 percent price-led growth.
“On a segmental basis, we bake in 9.5 percent YoY revenue growth for home care, 5.8 percent YoY growth for personal care and 10 percent YoY growth for packaged food and refreshments,” said Kotak which expects 36 percent growth in adjusted Q2 profit and 21 percent rise in EBITDA.
Operating performance is likely to be supported by lower commodity prices and cost saving measures.
“We expect 270 bps YoY expansion in EBITDA margin aided by gross margin expansion (150 bps), operating efficiencies (20 bps) and adoption of Ind-AS (100 bps). Net profit growth would be much higher owing to effective tax rate (ETR) cut and associated reversal of Q1FY20 taxes; we model 19 percent ETR for Q2FY20 translating into 25.2 percent ETR for first half of FY20,” Kotak said.
Motilal Oswal expects 150 bps expansion in operating profit margin YoY and 14.4 percent growth in EBITDA (earnings before interest, tax, depreciation and amortisation) while Emkay sees 15.5 percent growth in EBITDA and 202 bps increase in margin compared to year-ago.
Key issues to watch out for would be comments on consumer demand environment, pace of rural growth, competitive intensity especially in detergents, performance of Lever Ayush, WIMI growth.
