Shares of Hindustan Unilever (HUL) jumped 2 per cent in Friday’s trade ahead of its September quarter results. Analysts are expecting the FMCG major to report a double-digit rise in net profit on a similar growth in net sales.
On Friday, the scrip rose 2.26 per cent to hit a high of Rs 2,659 on BSE. The scrip has risen 12.5 per cent year-to-date.
HDFC Institutional Research expects HUL to report a 9.9 per cent year-on-year (YoY) rise in profit at Rs 2,400 crore. It sees 13.9 per cent YoY rise in net sales at Rs 14,490 crore. The same brokerage expects Ebitda margin at 23.4 per cent, down 125 basis points.
“We expect net revenue growth of 14 per cent YoY with a volume growth of 3 per cent. We model 27 per cent YoY growth for growth for Home Care, 6 per cent growth for BPC and 11 per cent YoY growth for Food business,” HDFC Institutional Research said.
Prabhudas Lilladher in its results preview said that the rural slowdown is expected to continue in the September quarter and reverse from the second half of the financial year, given favorable base.
“Raw material prices, particularly palm oil, have reduced sequentially and we expect margins to improve from 3Q onwards as high-priced inventory would get utilised in Q2. The structural story remains intact,” it said.
This brokerage sees 14.6 per cent YoY rise in net profit at Rs 2,506.20 crore on a 21 per cent YoY rise in sales at Rs 15,396 crore.
“HUL’s revenue growth is expected at 21 per cent due to 14.5 per cent realisation growth and 6.5 per cent volume growth. Gross margins to remain under pressure due to unprecedented commodity inflation despite price hikes,” Prabhudas Lilladher said.