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HUL Q1 Earnings Preview: Topline, volume growth in focus
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HUL Q1 Earnings Preview: Topline, volume growth in focus
Jul 22, 2019 11:31 PM

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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