Expectation---HUL Q2 profit may rise 7%, volume growth seen around 3%:
Hindustan Unilever (HUL) is expected to report a 7.5 percent growth in second quarter profit at Rs 1,056 crore and 4 percent growth in revenue at Rs 8,036 crore on yearly basis, according to average of estimates of analysts polled by CNBC-TV18.
Hindustan Unilever (HUL) is expected to report a 7.5 percent growth in second quarter profit at Rs 1,056 crore and 4 percent growth in revenue at Rs 8,036 crore on yearly basis, according to average of estimates of analysts polled by CNBC-TV18.
Analysts do not expect any fireworks in Q2 as rural & urban demand is still weak. Raw material prices have been increasing but there is no big appetite for higher price hikes. Recovery is unlikely before H2FY17, feel analysts.
Key things to watch out for would be volume and price-led growth that are expected to be around 2-3 percent and 1-2 percent, respectively.
-Slowdown in volume growth may be on account of high base in year-ago period (in Q2FY16, volume growth was 7 percent, the highest in at least 12-13 quarters) and price hikes in soaps & skincare products.
-Last week, parent company Unilever had said market volumes in emerging countries were slightly down. It sees pain for one more quarter.
-Price-led growth higher is likely due to increased raw material cost. Soap prices increased by 4-8 percent during the quarter. PFAD cost, a key raw material for soaps, increased around 33 percent YoY.
-Analysts expect gross margin expansion of 90-120 basis points at 50.5-50.8 percent led by home care segment.
-EBITDA (earnings before interest, tax, depreciation and amortisation) may increase 9.5 percent year-on-year to Rs 1,462.4 crore and margin may expand 90 basis points to 18.2 percent in Q2 but there might be slower or negative growth on sequential basis.
