Hindustan Unilever expected to report 8.2-12.3% revenue growth in Q2FY22 – 3 things to look for as company announces results on Tuesday

Hindustan Unilever Q2FY22 – Fast Moving Consumer Goods (FMCG) major Hindustan Unilever Limited (HUL) is expected to post a revenue Rs 12,854.60 cr for July-September quarter, that is likely to go up 12.3 per cent Year-on-Year (YoY) and 7.9 Quarter-on-Quarter (QoQ), according to estimates by Yes Securities.

“Expect 8% volume and 6% price/mix growth to drive 14% revenue growth, margins to improve QoQ led by cooling off in palm oil prices offset by higher A&P spends,” the brokerage firm said in its report.

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Meanwhile, ElaraCapital estimates revenues to grow at 8.2 per cent YoY, at Rs 12,380. Sequentially it is seen to grow at 3.9 per cent. The two-year CAGR is expected to grow at 12.1 per cent.

HUL will be announcing its quarterly results for Q2FY22 on Tuesday.

Hindustan Unilever Q2FY22 Earnings Results - 3 things to watch out for

1) Q2FY22 Revenue – Yes Securities estimates revenues to go up by 12.3 per cent YoY and 7.9 QoQ. ElaraCapital estimates HUL revenues to grow at 8.2 per cent YoY. Sequentially it is seen to grow at 3.9 per cent.

2) Net Profit – PAT or Profit After Tax is seen at Rs 2,223.20 cr for the quarter ended 30 September, likely to go up 6.4 per cent YoY and 6.5 per cent sequentially according to Yes Securities. Elara sees PAT growth at 5.6 per cent YoY and 3 per cent sequentially. The 2-year CAGR growth is expected at 8.3 per cent.

3) EBITDA or Earnings Before Interests, Taxes, Depreciation and Amortisation is estimated at Rs 3,162.2 cr for the reporting quarter, down 47bps YoY while up 71bps sequentially as per Yes Securities. Elara estimates it at Rs 3023.30 cr. It is likely to go up 5.4 per cent 5.4 per cent YoY and 6.2 per cent QoQ.   

Shares of HUL today ended in the green, up 0.12 per cent on the NSE and settled at Rs 2652.75.  

Sector trends and outlook:

- Elara: FMCG universe to report value/volume growth of 8.8 per cent/4.9 per cent YoY in Q2FY22E with Q2FY22E average realisations anticipated to grow 5 per cent YoY, led by price hikes amidst steep inflationary scenario.

-  EBITDA margins of FMCG universe to contract 90bp YoY in Q2FY22E as calibrated price hikes and overhead cost control only partially offset input cost inflation.

- Edible oils saw a muted quarter due to volatility in edible oil prices.

- Price hike impact more prominent in categories such as edible oil, soaps, detergents and toothpaste.

- With opening up of the economy, post Wave II, categories linked to higher mobility such as skin care, hair oils, fabric wash, beverages and hair colour have seen a pick-up.