FMCG major Hindustan Unilever Ltd (HUL), which is due to announce its Q2FY23 financial results on today (Friday), is expected to post revenue growth of up to 21 per cent year-on-year (YoY) to Rs 15,396 crore. Its Ebitda margin is likely to see a contraction in the range of 64-200 basis points (bps), according to brokerages.
HUL had posted an increase of 13.85 per cent in its consolidated net profit to Rs 2,391 crore for the first quarter ended June 2022. Its total income stood at Rs 14,757 crore during the June 2022 quarter.
Kotak Institutional Equities said HUL might report a 17 per cent YoY revenue growth to Rs 14,890 crore for the September 2022 quarter, compared with Rs 12,724 crore in Q2FY22, while IDBI Capital said HUL’s business segments like beauty or personal care and home care are expected to push revenue growth to 11 per cent YoY at Rs 14,090 crore in Q2FY23 from Rs 12,724 crore in Q2FY22.
HDFC Securities said HUL’s adjusted PAT is likely to grow 10 per cent YoY to Rs 2,400 crore, whereas its Ebitda margin might contract 125 bps YoY to 23.4 per cent in Q2, due to high input costs inventory. Ebitda stands for earnings before interest, tax, depreciation and amortisation.
Prabhudas Lilladher expects HUL to post a 21 per cent YoY growth in revenue to Rs 15,396 crore due to 14.5 per cent improvement in realisations and 6.5 per cent growth in volume. However, gross margins will continue to remain under pressure due to commodity inflation despite price hikes. Therefore, Ebitda margin is expected to drop 200 bps YoY to 22.6 per cent in Q2FY23.
Segment-wise, Kotak Institutional Equities expects the home care segment to grow 29 per cent YoY, on the back of price hikes in laundry. Beauty and personal care might grow 13.5 per cent YoY. The food and refreshments segment is likely to see a 9 per cent YoY revenue growth as urban outperformance over rural will continue.
Amid rising inflation globally, Hindustan Unilever Limited in September hiked the prices of its products in the laundry and body-cleansing categories.
In the detergent category, HUL hiked the price of Wheel detergent for both the one kilogram and 500-gram packs. The increase was about 3.5 per cent, which reflected a jump of Rs 1-2 in both packets. A similar hike was seen in the company’s Rin detergent powder.
The price hike also affected soap bars like Lux and Lifebuoy, mainly the combo packs. Both the soaps saw a rise of almost 8-12 per cent. The grammage reduction for the small packs was also seen in the body-cleansing category.
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