HUL Q4 preview: PAT likely to slip 6% YoY; margins seen flat at 23% on increased ad spends

FMCG major Hindustan Unilever (HUL) is slated to reveal its March quarter earnings on April 24, 2024. Zee Business Research desk estimates the company to report a subdued quarter with revenue seen declining 1 per cent on year to Rs 15,127 crore.

The revenue for the March ended quarter is expected to come in at Rs 15,127 crore, down 1 per cent in contrast to Rs 15,215 crore registered during the previous fiscal year. Also, EBITDA, a measure of operational profitability, is also seen to take a hit by 3 per cent to Rs 3479 crore as against the earlier Rs 3574 crore, down 3 per cent. The margins at the company will also be impacted on the back of increasing spend towards advertisements and come in at 23 per cent versus 23.5 per cent in the previous year.

Consequently, PAT or profit after tax at the company as per the Research desk will decline by 6 per cent to Rs 2454 crore as against Rs 2601 crore.

The desk maintains that an impact of a 2 per cent cut in price and a 40 bps increase in royalty will be seen.  Also, the company's volume is seen to register a 3 per cent growth in the domestic markets.

In addition, the company's OTC and oral care segment will see a blow due to the suspension of the agreement between HUL and GSK.

Furthermore, while the homecare segment of the company is seen to log decent growth, in the beauty and personal care (BPC) segment, the company is expected to log flat growth.

Key monitorables

Investors and the markets will keep an eye on demand outlook in both the rural and urban markets together with competitive intensity and raw material price trends.

HUL Q3 results

In the December quarter, HUL on a consolidated basis reported total revenue at Rs 15,781 crore, while operating profit has been at Rs 3666 crore. Net profit at the company for the December ended quarter has been at Rs 2509 crore. 

HUL share price

Ahead of its results tomorrow, shares of the company traded with gains of over 1 per cent at Rs 2268.45, up 25.9 per share on the BSE.