HUL Q2 results preview: FMCG major likely to see 3% volume growth; PAT expected to be flat

HUL Q2 results: Hindustan Unilever (HUL) is all set to declare its financial results for the quarter ended September 30, 2023 (Q2FY24) on Thursday, October 19. The FMCG behemoth, according to Zee Business Research, is estimated to report revenue of Rs 15,224 crore on a standalone basis, up 3 per cent year-on-year (YoY). The company posted revenue of Rs 14,751 crore in the year-ago period. EBITDA, or earnings before interest, taxes, depreciation, and amortisation, is estimated to rise 6 per cent YoY to Rs 3,589 crore against Rs 3,377 crore logged in the corresponding quarter of the previous fiscal.

Margins are estimated to come in at 23.6 per cent against 22.9 per cent logged in the previous year's quarter, and net profit, or profit after tax (PAT), is expected to be flat at Rs 2,603 crore against Rs 2,616 crore registered in the Q2 FY23 period.

The company is expected to register 3 per cent volume growth. Its pricing growth is expected to be flat. The impact of a reduction in the costs of soaps, shampoos, and laundry products is expected to reflect on the company's income. A cut in raw material costs is expected to aid gross margins slightly. One of the key monitorables includes management commentary on the H2FY24 outlook. Besides, rural recovery demand will also be closely watched.

India's FMCG sector 

The fast-moving consumer goods (FMCG) sector is India’s fourth-largest sector and has been expanding at a healthy rate over the years because of rising disposable income, a rising youth population, and rising brand awareness among consumers. With household and personal care accounting for 50 per cent of FMCG sales in India, the industry is an important contributor to India’s GDP, according to an industry report by the India Brand Equity Foundation.

Growing awareness, easier access, and changing lifestyles have been the key growth drivers for the sector. The urban segment (which accounts for a revenue share of around 65 per cent) is the largest contributor to the overall revenue generated by the FMCG sector in India. However, in the last few years, the FMCG market has grown at a faster pace in rural India compared to urban India. Semi-urban and rural segments are growing at a rapid pace, and FMCG products account for 50 per cent of the total rural spending, the report says further.

FMCG Industry's market size

Source: https://www.ibef.org/