HUL Q3 preview: EBITDA to grow 5% on-year; management's commentary on demand trends and margins eyed

Hindustan Unilever (HUL), the country’s leading fast-moving consumer goods (FMCG) player, is set to declare its Q3 numbers tomorrow (January 19). Zee Business research desk estimates Q3 standalone revenue to come in at Rs 15,324 crore for the December-ended quarter versus Rs 15,228 crore on the back of price reductions during the period under review, posting a 1 per cent increase year-on-year (YoY).

Additionally, concerning the EBITDA, which is a measure of profitability, the desk estimates a 5 per cent YoY increase to Rs 3,699 crore versus Rs 3,537 crore. The research team notes that the higher outlay towards ad spending will impact the margins.

The margins at the final goods company are seen edging higher by a per cent to 24 per cent as against 23 per cent in the corresponding period last year. The research team estimates PAT, or profit after tax, to shore up by 7 per cent on year to Rs 2,669 crore versus Rs 2,505 crore.

The company is seen to witness a marginal 2 per cent volume growth as a slowdown in rural demand will continue to weigh.
 

Key  monitorables

For investors, the focus should be on management’s commentary on demand trends as well as margins.
 

HUL's September quarter performance 

The company in the September-ended quarter of FY24 posted standalone revenue of Rs 15,559 crore, while its net profit came in at Rs 2,717 crore.

Shares of HUL have underperformed the headline indices in the past 12 months with a negative return of over 4 per cent. The shares of the company in afternoon trade on Thursday were down 0.5 per cent at Rs 2,550.8 apiece.