Hindustan Unilever Ltd (HUL) would be reporting its Q3FY20 results today. Here are key expectations.
The analysts have a cheat sheet. Unilever said that India has done well in the slowing market. There was some price deceleration, which means the volume growth this time around would be extremely important.
The stock is trading at around 52 times FY21 earnings.
The three numbers to watch out for HUL would be 13 percent growth in the company’s EBITDA and net profit, 5 percent revenue growth led by 4 percent volume growth.
The revenues that the street is working with is just upwards of Rs 10,030 crore mark, While EBITDA is expected at Rs 2,300 crore, which means an expansion of close to around 150-160 basis points (bps) on the EBITDA margins at 23.1 percent and the net profit to come in at Rs 1,650 crore.
Domestic volume growth of 4 percent is something that the analysts are working with. For the last couple of quarters they have reported mixed single-digit volume growth and that should sustain.
However, the management commentary on HUL would be key because they were the ones who first pointed out the rural slowdown which grew at par with urban and now rural is growing at just half times urban. So, anything that they speak in terms of recovery, the Rabi season and what they expect in the rural business would be important.
Secondly, anything that they say other than numbers, which is the GSK merger would be important as well given the fact that Unilever yesterday said that GSK merger with HUL is likely to be completed in the first half of 2020.