India’s largest fast moving consumer goods company Hindustan Unilever is expected to see a 13 percent on-year jump in both topline and bottomline for the quarter ended March 2023. The company will announce its Q4 FY23 results on April 27 during market hours.
According to a poll of brokerages, HUL’s standalone Q4 revenue is seen at Rs 15,277 crore and net profit at Rs 2,584 crore. Estimates suggest price-hike led revenue growth will be about 9 percent and volume growth will be close to 5 percent. Last quarter, too, volume growth was 5 percent.
“We expect continued strength in home care revenue growth on the back of price hikes in laundry. There will be some improvement in beauty and personal care segment, as the spillover in winter portfolio gets offset by price cuts in skin cleansing,” as per Kotak Institutional Equities.
Home care segment’s sales is seen rising 22 percent YoY and personal care products by 10 percent, on the back of festivities and increased outdoor activities.
On the margin front, EBITDA margin is expected to decline marginally on a year-on-year basis due to higher advertisement spends. EBITDA stands for earnings before interest, taxes, depreciation and amortization.
In Q3, too, the company had not passed on the full impact of cool off in palm oil prices and had upped ad spends instead. BNP Paribas expects A&P spends to be 8.5 percent of Q4 sales.
The key factors to watch will be how rural markets are faring vis-à-vis urban areas. HUL derives 40 percent of its sales from rural India, where consumers have been downtrading to cheaper alternatives thus impacting volume growth.
The Street is also waiting to hear from CEO designate Rohit Jawa, who takes over Sanjiv Mehta in June. This will be Mehta’s last earnings concall with HUL.
Other key factors to watch: Outlook on nutrition business, discretionary consumption and out-of-home demand.
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