Moneycontrol
Jul 18, 2017 07:40 AM IST | Source: CNBC-TV18

HUL Q1 profit seen flat, revenue growth may be 3%; volume outlook key post GST rollout

Topline and operational performance will be key to watch out for while the Street is divided on volume growth given uncertainty post GST rollou


FMCG major Hindustan Unilever, which is set to declare its June quarter earnings on July 18, is expected to report flat growth in profit at Rs 1,175 crore against Rs 1,174 crore in same quarter last fiscal.

In June quarter 2016, the company had reported an exceptional gain of Rs 70.8 crore.

Topline and operational performance will be key to watch out for while the Street is divided on volume growth given uncertainty post GST rollout.

According to analysts polled by CNBC-TV18, revenue is seen rising 2.7 percent year-on-year to Rs 9,040 crore while operating profit may increase 4 percent to Rs 1,700 crore and margin may expand 20 basis points to 18.8 percent compared with year-ago quarter.

Underlying volume growth is seen in the range of 2 percent degrowth to 2 percent growth against 4 percent each in year-ago quarter and previous quarter.

Important factors to watch out for would be commentary on:-
> Volume outlook & GST implementation
> Rural demand recovery & outlook on second half of FY17
> Input cost environment

> Advertising spend outlook

Key segments:

Analysts expect 2-3 percent revenue growth in personal care segment (soaps, shampoos, skincare & oral care, cosmetics) that contributes 50 percent to total revenue and 70 percent to EBIT.

According to them, home care segment (Surf Excel, Rin, Wheel, etc), which accounts for 30 percent of revenue and 20 percent of EBIT, may post 1-2 percent revenue growth.

Analysts feel any announcement of bonus, special dividend or buyback may enhance shareholder value as Unilever PLC had said that they were looking at various ways to expedite enhancement of shareholder value (after rejecting Kraft’s takeover deal).

The stock ended at record closing high of Rs 1,152.80, up 1.15 percent on Monday. It gained more than 38 percent in 2017.
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