Moneycontrol
May 14, 2018 12:30 PM IST | Source: Moneycontrol.com

Hindustan Unilever Q4 preview: Profit seen up 12% on strong margins  

Net sales are seen rising 9.26 percent YoY to Rs. 8,850 crore, according to the poll.

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Hindustan Unilever is likely to report 12.03 percent year-on-year (YoY) increase in the net profit at Rs. 1,326.5 crores, as per a Reuters poll of equity analysts.

Net sales are seen rising 9.26 percent YoY to Rs. 8,850 crore, according to the poll.

Earnings before interest, tax, depreciation, and amortisation (EBITDA) are likely to increase 9.5 percent YoY to Rs. 1,900 crore.

Brokerage firms expect volume growth to be in the range of 6-8 percent.

The company will announce its financial results on May 14.

This will be the first full quarter after the company cut down product prices across its portfolios.

Nirmal Bang in its report said, “We believe that encouraging response for Lever Ayush, continuing premiumisation trend, its disproportionate share in modern trade channels, growing presence in both mass and premium naturals segments, new launches and signs of rural growth coming back on track could help the company to post strong volume-led growth.”

Analysts said that on the cost side, its initiatives like Zero-Based Budgeting (ZBB) will continue to bring down the overheads, but there will be some pressure on gross margin because of rising cost of crude oil.

Despite the pressure on input prices, analysts expect operating margin to grow 170 basis points YoY led by a higher share of the premium portfolio and cost optimisation measures.

Growth in rural markets, a growth of naturals portfolio, premiumisation trend and input prices are the key things to watch out for during the earnings presentation.
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