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Earnings

HUL Q1 Earnings Preview: Topline, volume growth in focus

Updated : July 23, 2019 08:31 AM IST

Hindustan Unilever Ltd (HUL) will report its June-quarter results on Tuesday and analysts expect the FMCH major to double-digit profit growth.

  • The street has been talking about the rural slowdown as well as protracted growth weakness as far as demand is concerned.

  • This time around, more than ever, the analysts will be watching out for HUL’s topline. 7.5 percent growth is what the CNBC-TV18’s poll throws up. The number is close to around Rs 10,225 crore. This topline would be broken in two parts, volume growth and price growth.

  • Volume growth that the street is working with is 5 percent. It comes off a very high base of 12 percent. So 5 percent volume growth – if the company does go ahead and posts, the street would like that. The remaining 2-2.5 percent comes in from product mix, realisations growth as well as a few selective price hikes that the company has taken.

  • EBITDA, as a result of that, is likely to grow by about 10 percent. The number you are watching out for is close to about Rs 2,480 crore. That means a margin expansion of around 50 basis points, the number is 24.2 percent. As a result of which 7.5 percent growth in the topline, 10 percent growth in the EBITDA means the net profit grows by around 13 percent.

  • Because everyone has been talking about that rural growth slowdown, the company has taken price hikes. So in the face of a rural slowdown and some price hikes, does consumer sentiment hold up or not is the big question.

  • Two of their biggest segments, home and personal care expect high single-digit to low double-digit growth out there in both, the revenue as well as the EBIT.
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