FMCG major Hindustan Unilever is likely to report healthy double-digit growth in all earnings parameters for the quarter ended March 2020 on the back of low base due to lockdown in the year-ago quarter and GSK Consumer Healthcare acquisition.
Brokerages largely expect more than 30 percent year-on-year growth in revenue with strong demand for home care and personal care products, while profit could grow in the range of 30-40 percent compared to the same quarter last year.
"We model 20 percent organic revenue growth led by 15 percent YoY growth in underlying volume growth (UVG). Reported revenues including GSK Consumer Healthcare acquisition would be up 35 percent YoY," said Kotak Institutional Equities which sees a 42 percent YoY growth in profit.
The brokerage forecasts 9 percent revenue growth in home care segment, 23 percent revenue growth in beauty & personal care segment, and 33 percent organic revenue growth in packaged foods and refreshments segment partly aided by price hikes in tea.
According to ICICI Direct, HUL is likely to post a 32.7 percent revenue growth in Q4 FY21 given 9.4 percent sales decline in the base quarter due to lockdown in the last 10 days of March 2020. Moreover, consolidation of acquired nutrition business would also add to revenues, said the brokerage which sees a 32 percent YoY growth in profit.
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At the operating level, EBITDA (earnings before interest, tax, depreciation and amortisation) could grow more than 40 percent with triple digit expansion in margin compared to Q4 FY20.
"We expect a 45 bps YoY expansion in reported gross margin and around 100 bps YoY contraction in LFL gross margin (ex-GSK Consumer Healthcare) due to raw material inflation, partly offset by price hikes. We build in 24.4 percent EBITDA margin (up 151 bps) with tailwinds from GSK Consumer Healthcare acquisition balancing raw material pressures and higher media spends," said Kotak which sees a 44 percent YoY growth.
According to Emkay, gross margin contraction could be 70 bps due to higher input inflation from palm oil, tea and crude prices, while EBITDA is likely to increase 48 percent YoY and margin may expand 170 bps YoY in Q4 FY21.
