Hindustan Unilever Ltd (HUL) will announce its results for the quarter and half year ended on September 30, 2024 (Q2FY25 and H1FY25) on Wednesday, October 23. The company reported a flattish growth in revenue on a year-on-year (YoY) and quarter-on-quarter (QoQ) as per the analysts expectations.
Market participants believe that the company may report a marginally drop in the Ebitda despite a marginal expansion in the margins. Net profit may be seen falling on yearly basis, while profit may remain flat on a sequential basis. Demand recovery and product portfolio shall be key monitorables for the company.
Kotak Institutional Equities sees HULs revenue to come in at Rs 15,728.3 crore, up 3 per cent YoY, while Ebitda may drop marginally YoY to Rs 3,686.6 crore, while Ebitda margin may fall marginally to 23.4 per cent. Its net profit may come in at Rs 2,656.9 crore, down 2 per cent YoY but up 4.7 per cent QoQ.
"We model sequentially stable gross margin as slight improvement in personal wash margin would be offset by margin pressure in tea. We estimate a 23.4 per cent Ebitda margin with 25 bps effective increase in royalty, 40-50 bps impact of discontinuation of distribution of OTC products and adverse operating leverage on fixed expenses weighing on margins," it said.
Nuvama Institutional Equities pegs HUL's revenue of Rs 15,628.1 crore, flattish growth on yearly and quarterly basis. Ebitda may remain flat at Rs 3,667.5 crore, falling marginally YoY. The company's net profit came in at Rs 2,622.6 crore, falling 4 per cent YoY and flat sequentially.
"We anticipate a demand recovery to be gradual for HUL; negative pricing is likely to reverse in H2FY25. Base quarter included one-off credit from resolution of tax litigation benefiting both revenue and PAT. In Q2FY25, we reckon standalone revenue shall grow while volumes are likely to increase," Nuvama adds. "Pricing cuts are likely to be lower than the previous quarter."
Ahead of its earnings, shares of HUL opened 2 per cent lower on Wednesday at Rs 2,633.55 compared to its close at Rs 2,682.05 on Tuesday. However, the stock turned flat as the session progressed.
Anand Rathi Research pencils HUL's revenue to come in at Rs 15,477.8 crore, flatting on both YoY and QoQ basis, while Ebitda margin is seen coming in at 24.4 per cent, increasing 90 bps sequentially. The company's net profit came in at Rs 2,786.8 crore, which may increase 7.8 per cent YoY and 2.4 per cent QoQ. HUL remains among top picks of Anand Rathi from FMCG space.
Demand trends were stable QoQ, with rural outperforming urban, said Motilal Oswal. "We expect 5 per cent YoY domestic volume growth in 2QFY25. In the base quarter (Q2FY24), a one-off benefit from the favorable resolution of an indirect tax litigation contributed to an additional 1 per cent sales increase. We model 2.4 per cent revenue growth in 2QFY25," it said.
Intrinsic Ebitda margin is expected to remain flat YoY. We model 23.6 per cent in Q2FY25 considering the impact of the increase in royalty and the discontinuation of distribution of OTC products of GSK. The company continues to prioritize reshaping its portfolio and expanding its existing brands, Motilal Oswal added.