HUL Q1FY23 Results Preview: Brokerages see double-digit growth in PAT, revenue

Fast-moving consumer goods (FMCG) major Hindustan Unilever may report double-digital rise in profit and revenue during the June-end quarter of the financial year 2022-23 (Q1FY23), several brokerages say expect YES Securities, which see top line may come stable and bottom line flat with negative bias. 

Highest of all expectations, ShareKhan believes the revenue of HUL may see a surge of nearly 15 per cent and profit up over 11 per cent year-on-year (YoY), while Motilal Oswal sees both revenue and profit surging around 12-13 per cent YoY during the quarter. 

In Q1FY23, the consumer goods sector will be affected by higher inflation in commodity prices that would hit domestic demand and put pressure on profitability in the short term, ShareKhan said in a preview report. 

It added that the higher food inflation and uncertain macro environment would lead to sluggish domestic demand (especially in the rural India). This would affect sales volumes for consumer goods companies with volume growth expected to be between -5 to 3-4, the brokerage added. 

While Motilal Oswal expects 2 per cent YoY domestic volume growth for Hindustan Unilever on a high base in the last year and outlook on the nutrition business and rural versus urban demand. 

The gross margins to contract 130 basis points (bps) YoY, led by higher material costs, the brokerage said. Key Monitorables: Outlook on raw material cost, discretionary, and out-of-home demand. 

On the contrary, YES Securities expects muted revenue growth of 6 per cent on a base of 13 per cent, margins to remain stable YoY during the June-end quarter. 

Ahead of its results on Tuesday, shares of HUL closed marginally in the red, down over 0.6 per cent to Rs 2552.6 per share on the BSE as compared to nearly 1.5 per cent rise in the S&P BSE Sensex.