Soap price hike, demonetisation may hurt Hindustan Unilever Q3 revenues
Soap price hike, demonetisation may hurt Hindustan Unilever Q3 revenues
Home and personal care products major, Hindustan Unilever (HUL), may have its sales impacted due to demonetisation; however, as it prepares to announce its third quarter results today analysts cite another reason for its possible 2% decline in revenues.
“HUL’s domestic FMCG business to post 2% decline in revenues due to 5% yoy decline in underlying volume growth (UVG) and 3% price-led growth (aided by recent price hikes across categories, especially soaps),” Rohit Chordia, Anand Shah and Abhas Gupta, analysts of Kotak Institutional Equities said in a report dated January 3.
Analysts said that as the company hiked the price of soaps around the second quarter of FY16, demonetisation will have an accomplice as it too put pressure on the company’s sales.
“Apart from demonetization impact, we expect UVG to be dragged by sustained impact of promotion withdrawal in soaps (category-level impact),” the analysts added.
HUL’s shares were trading flat during the first hour of trading as it opened at Rs 855.5 and was trading at 864 per share, up just 0.34% from its previous price.
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