HUL Q3 net profit seen down 14%, volume may grow 6-7%

Hindustan Unilever is likely to report tepid weak December quarter results. Its Q3 net profit is seen down 14 percent at Rs 1073 crore from Rs 1252 crore in corresponding quarter last fiscal. Reported net profit in comparable quarter had an exceptional gain. Adjusted profit after tax is seen up 8.3 percent at Rs 1073 crore in Q3 versus Rs 990 crore in year-ago period. Its profit is unlikely to grow in line with margins due to higher taxes and lower other income.

According to a CNBC-TV18 poll, revenue is likely to grow 5.7 percent at Rs 8220 crore  from Rs 7774 crore (year-on-year) while volume growth is seen at 6-7 percent. HUL had taken a rural distribution clean up exercise during the quarter which may impact volume growth for the Q3. A 1.5 percent price deflation and promotion is also expected to be seen in the quarter.

EBITDA, during the quarter, is likely to be up 9.9 percent at Rs 1464 crore against Rs 1331 crore and EBITDA margins at 17.8 percent versus 17.1 percent.

Analysts polled by CNBC-TV18 say lower input costs may support gross margin expansion by 100-130 basis points and also benefit arising from the fall in crude oil prices will come into the base. Palm Fatty Acid Distillate (PFAD) price have corrected 32 percent and Linear Alkyl Benzene (LAB) price slipped 24 percent in Q3 on annual basis.