HUL Q4 Preview: Revenue to grow 1.3% YoY on modest volume growth, price cuts across categories

Meanwhile, revenue from operations for the reporting quarter is estimated at Rs 15,005.33 crore, up by 1.9% over the corresponding quarter of the last financial year.

The company had reported a net profit of Rs 2,552 crore in the quarter ended March 31, 2023, while the revenue was at Rs 14,638 crore.

HUL shares ended at Rs 2,263 on the NSE on Tuesday, up by Rs 21.50 or 0.96% over the Monday closing price.

Here's what these brokerage recommended:

Anand Rathi

Anand Rathi sees Q4FY2 revenue at Rs 14,931 crore, up 2% on a YoY basis while flat on a sequential basis. The adjusted PAT is seen to be reported at Rs 2,484.70 crore up 0.5% YoY and down by 2.5% QoQ. The earnings before interest, taxes, depreciation and amortisation (EBITDA) margin is likely to stand at 23.1% versus 23.3% in Q4FY23 and 23.3% in Q3FY24.

Sharekhan

Sharekhan estimates a revenue figure of Rs 15,309 crore for the final quarter of FY24, which is expected to go up by 2.8% on a YoY basis. The revenue growth will be aided by 2-4% Y-o-Y growth in personal care and foods & refreshments categories, while homecare is likely to decline by 1%.

The operating margin (OPM) is seen at 22.8% in Q4FY24 versus 23.3% in Q4FY23, down by 52 bps due to higher advertisement and other expenses. Meanwhile the gross margins are expected to be higher by 280 bps Y-o-Y, aided by softening of raw material prices.

The brokerage sees adjusted PAT at Rs 2,489 crore versus Rs 2,472 crore in Q4FY23, up by 0.7% in line with 0.5% Y-o-Y operating profit growth

Axis Securities

Revenue seen at Rs 14,776 crore, up by 0.9% YoY versus Rs 14,638 crore in Q4FY23. On the sequential basis, revenue is expected to be 1% lower from Rs 14,928 reported by the company in Q3FY24. The moderation is revenue will be on account of 3% volume growth and 2% price cut as subdued performance across categories created headwinds.

Axis estimates PAT at Rs 2,407 crore lower by 2.6% versus 2,471 crore in Q4FY23 and 5.3% down versus Rs 2,541 crore in Q3FY2024.

EBITDA for the reporting quarter is expected to be Rs 3,481 crore, up o.3% from 3,471 crore in Q4FY23. On the QoQ basis, it is likely to come down by 1.7% to Rs 3,540 crore. EBITDA margins are likely to remain flat at 23.6% owing to higher ad-spends, higher royalty payment , offsetting gross margins expansion of 410 bps YoY.

Key monitorables will be the demand outlook on rural versus urban business and competitive intensity along with raw material trends.

Nuvama

Negative price growth is anticipated to continue in Q4FY24 for companies such as HUL, similar to Q3 due to passing on of gross margin expansion. This shall likely lead to muted topline growth. FMCG companies may hike prices by 2–3% by the second half of FY25, led by volatile commodity prices, notably of food and crude oil, and wage inflation. Small and calibrated price hikes may also boost price-led growth, which has been flat to negative for most companies through FY24.

In Q4FY24, rural volume growth for consumer staples in general is likely to be sluggish YoY (like Q3) with a marginal improvement on a two-year basis, Nuvama said.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)