HUL Q3FY22 Preview: 21% jump in consolidated PAT expected, says Axis Securities; EBITDA margin could improve aided by price hikes; grammage cuts
Several analysts expect that both the top and bottom line may grow year-on-year (YoY), while the margins may come mixed during the reporting quarter.
Fast moving consumer goods (FMCG) major Hindustan Unilever Limited (HUL) is likely to report strong third quarter earnings for the financial year 2021-22 (Q3FY22). Several analysts expect that both the top and bottom line may grow year-on-year (YoY), while the margins may come mixed during the reporting quarter.
According to Axis Securities, the consolidated profit after tax may surge around 21 per cent to Rs 2,321 crore and revenue is likely to soar by over 10 per cent to Rs 13,056 crore during the quarter. In comparison, the profit and reported revenue reported during Q3FY21 were at Rs 1,921 crore and Rs 11,862 crore respectively.
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Similarly, EBITDA may grow over 15 per cent to Rs 3287 crore in December-end quarter of FY22 as compared Rs 2584 crore in Q3FY22, and margins may surge by 25.2 per cent from 24.1 per cent YoY.
“Reported revenues to grow 10 per cent with a 3 per cent UVG growth led by improved traction in OOH/Personal Care segments, slowdown in rural demand and recovery in discretionary categories and healthy traction in HFD portfolio,” Axis Securities said.
Similarly, “EBITDA margin to expand around 100bps/60bps YoY/QoQ respectively aided by price hikes, grammage cuts even as GMs contract, and PAT to be higher than EBITDA performance led by other income,” the domestic brokerage said.
On standalone basis, the company’s profit may grow around Rs 2100 crore, up almost 8 per cent YoY, while net sales may surge to Rs 12,820 crore, up 8 per cent YoY during the third quarter of FY22, the domestic brokerage house Motilal Oswal said in preview report.
Similarly, the margins of HUL according to Motilal Oswal may come flat at 23.5 per cent from 24.1 per cent YoY.
“Expect domestic volume growth (including GSKCH) of 2 per cent YoY and outlook on the nutrition business and rural versus urban demand,” Motilal Oswal said. Meanwhile, gross margins are likely to contract by 130p YoY, led by higher material costs, despite price increases and a favorable mix, it further said.
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