 "HUL Q1 revenue may rise up to 9% YoY; soft RM costs to aid margin: Analysts")
FMCG giant Hindustan Unilever (HUL) is expected to clock up to 9.3 per cent year-on-year (YoY) revenue growth in the April-June quarter of fiscal year 2023-24 (Q1FY24) on modest volume growth, forecasted analysts.
The company is scheduled to announce the June quarter results on Thursday, July 20.
As per brokerages, earnings before interest, tax, depreciation, and amortisation (Ebitda) margins is likely to expand up to 63 basis points (bps) YoY to 23.4 per cent in Q1FY24, owing to moderating input costs.
Profit-after-tax (PAT), on the other hand, is pegged to grow ahead of Ebitda at 13.7 per cent YoY to Rs 2,602 crore in Q1FY24, said analysts.
At the bourses, shares of HUL gained 4.8 per cent so far this calendar year (CY23), as against 9.7 per cent rise in the S&P BSE Sensex, during the same period.
Key monitorables: Demand outlook on rural versus urban, competitive intensity, raw material trends, pricing actions, new launches strategy, and sustainability of cost-saving measures.
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Here's what top brokerages estimate for HUL Q1FY24 numbers:
BNP Paribas
Analysts expect domestic organic volume growth to be 4 per cent on a YoY basis, with urban continuing to outperform rural volume. Home care segment's revenue growth is expected to moderate to 10 per cent YoY, while personal care is likely to deliver 10 per cent YoY sales growth, and food and refreshments segment may report subdued revenue growth of 8 per cent due to unseasonal rainfall.
On the margin front, the brokerage firm foresees 165 bps YoY improvement in gross margins to 49 per cent in Q1FY24, while operating margins may rise 35 bps YoY to 23.1 per cent on cooling input costs.
Axis Securities
The brokerage firm models Hindustan Unilever's revenues to moderate 9 per cent YoY to Rs 15,600 crore, on account of anniversarisation price increase and price cuts. However, volume growth is likely to inch up further led by home-care and personal care.
Ebitda margins, analysts expect, is likely to expand modestly by 63 bps YoY to 23.4 per cent in Q1FY24, owing to higher ad-spends, offsetting gross margin expansion of 150 bps YoY.
HDFC Securities
Vertical-wise, analysts forecast home-care, beauty and personal care (BPC) as well as food business are likely to grow at 13 per cent, 8 per cent, and 4 per cent, respectively. That said, the brokerage firm shared a 'reduce' call on the counter, with a target price of Rs 2,669 per share.