HUL Q3 results preview: Profit may rise 8-12% YoY. Volumes & other things to watch

Hindustan Unilever (HUL) is likely to report a 8-12 per cent year-on-year (YoY) rise in net profit for the December quarter on a 12-14 per cent YoY rise in revenues, largely led by price increases. Volume growth is seen at 5 per cent YoY. The FMCG major may report a fall in margins on a YoY basis, analysts said. 

Kotak Institutional Equities sees HUL's consolidated profit at Rs 2,481.50 crore for the December quarter, up 8.3 per cent YoY over Rs 2,292 crore in the year-ago quarter. Revenues for the quarter are seen jumping 13.8 per cent YoY to Rs 14,904 crore from Rs 13,092 crore. Ebitda margin is seen falling to 23.5 per cent from 25 per cent a year-ago, but improving from 22.9 per cent in the September quarter.

The brokerage expects continued strength in home care revenue growth on the back of price hikes in laundry, slight improvement in underlying BPC growth despite price cuts in skin cleansing and late onset of winter. It sees some respite on GM front led by softening of crude/palm oil.

Investors would be awaiting management commentary on improvement in rural business, recovery in personal care, pricing actions and new launches strategy and sustainability of cost-saving initiatives, analysts said.

ICICI Securities expects Hindustan Unilever logging 12.3 per cent YoY jump in net profit at Rs 2,519.20 crore. The domestic brokerage sees sales for the FMCG giant climbing 12.6 per cent, largely led by pricing growth. ICICI Securities expects volume growth at 5 per cent and pricing growth at 7 per cent. Gross margin is expected to contract 392 bps YoY, but improve 240 bps sequentially, the brokerage said. 

Among segment, ICICI Securities expects Home Care to see 23 per cent sales growth, thanks to price hikes in last one year.

"Further, detergent has continued to see strong volume growth. Beauty & personal care segment is estimated to post 5.3 per cent sales growth as the company has passed on benefits of palm oil price decline in terms of price cuts in soaps in October 2022. Food & refreshment segment is expected to see growth of 2.3 per cent mainly due to price deflation in the tea segment," it said.