HUL Q3 result preview: FMCG major likely to see flat revenue, net profit growth; weak demand to hit volumes
Hindustan Unilever is set to release its Q3 results on Friday, January 19. The company is likely to report a marginal rise of 2.2% in its net profit for Q3FY24 at ₹2,638 crore as compared to ₹2,581 crore in the corresponding quarter of last fiscal, as per average estimates of 5 brokerage houses. Also Read: Q3 result preview: FMCG sector expected to see mid single-digit volume growth, margin expansion trend to continue HUL’s revenue during the quarter ended December 2023 is estimated to remain flat year-on-year (YoY) at ₹15,400 crore.
The company is expected to deliver muted volume growth of around 1%-2%. “We model flat YoY revenue growth in view of demand trends largely tracking 2Q; no material pick-up in the festive demand, resulting in 2% YoY growth in UVG. HUL’s price reductions are expected to impact topline growth," Kotak Institutional Equities said.
(Exciting news! Mint is now on WhatsApp Channels Subscribe today by clicking the link and stay updated with the latest financial insights! Click here!) The home-care category growth is expected to moderate to 0.5% YoY due to price cuts in the laundry portfolio. The beauty and personal care (BPC) segment growth is also likely to moderate to 0.8% YoY owing to price cuts in soaps. At the operating level, HUL’s earnings before interest, tax depreciation and amortisation (EBITDA) is expected to rise 1.3% to ₹3,581 crore from ₹3,537 crore, YoY.
EBITDA margin is likely to expand by 77 basis points (bps) to 24.0% from 23.2% YoY on the back of lower palm oil costs and other input costs. “EBITDA margins expansion will be moderate owing to higher ad spends, offsetting gross margins expansion of 523 bps YoY. PAT growth will be inline with EBITDA growth," Axis Securities said.
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