HUL Q1 preview: Fast-moving client items (FMCG) maker Hindustan Unilever (HUL), in keeping with the trade’s development, is anticipated to put up robust gross sales quantity progress within the June quarter, helped by low-base impact and traction in magnificence & private care and meals & refreshment segments. The large-cap client items firm is slated to put up its Q1FY22 outcomes on Thursday, July 22.

“The FMCG sector witnessed a high growth quarter on the back of lower sales in the base quarter, which was marred by the country-wise strict lockdown. Though Q1FY22 also witnessed the adverse impact of a second Covid-19 wave and subsequent state-wise lockdowns, the impact on supply chain was minimal with industry, government and trade channel’s preparedness,” Sanjay Manyal, analysis analyst at ICICI Direct stated.

That stated, analysts are divided on working margins outlook. While one faction expects a pointy improve in enter and packaging prices to weigh on margins, the opposite believes worth hikes would offset any such improve.

Competitive depth, uncooked materials traits, demand traits for OOH (out of dwelling) classes, analysts say, are amongst key monitorable. On NSE, shares of HUL rose a mere 1.6 per cent through the quarter beneath evaluation as towards a 7 per cent rise in Nifty50 and three per cent within the Nifty FMCG index.

Here’s a have a look at what prime brokerages anticipate from HUL’s Q1 numbers:

Axis Securities

The reported revenues will rise 12 per cent on a decrease base and eight per cent/4 per cent quantity/price-led progress aided by improved traction in OOH and private care segments led by lockdown easing, the brokerage stated including that GSK-Consumer Healthcare (CH) too would see wholesome contribution in Q1.

It pegs June quarter income at Rs 11,850 crore as towards Rs 10,560 crore posted in the identical quarter final fiscal. Quarter-on-quarter (QoQ), the brokerage sees income declining by 2.3 per cent from Rs 12,132 crore posted within the March quarter.

EBITDA (earnings earlier than curiosity, tax, depreciation and amortisation) margin to maintain YoY owing to cost hikes, tailwinds from GSK-CH integration and price financial savings, the brokerage added. It tasks Q1 EBITDA margin at 25.1 per cent as towards 25 per cent posted by HUL within the corresponding quarter final 12 months and 24.4 per cent in March 2021 quarter. Similarly, revenue could be larger in keeping with improved EBITDA efficiency, it opined, pegging the determine at Rs 2,166 crore, up 15.2 per cent YoY. In June final 12 months, PAT stood at Rs 1,881 crore. Sequentially, it might rise 1.1 per cent from Rs 2,143 crore.

ICICI Direct

HUL is prone to report 21.3 per cent YoY income progress at Rs 12,807.6 crore led by 29.9 per cent progress in magnificence & private care phase (BPC) and 22 per cent progress in meals & refreshment phase, ICICI Direct stated. Both these segments have been adversely impacted by lockdown within the base quarter.

“We believe home care segment would grow at slower 3.7 per cent given the second wave of pandemic would have impacted detergent sales,” it added. On a QoQ foundation, income might rise 11.9 per cent as per this brokerage’s estimates.

With the sharp improve in palm oil costs and elevated tea procurement costs, it expects working margins to contract 175 bps to 23.3 per cent. Although, it expects web revenue to develop 11.3 per cent YoY and 4.2 per cent sequentially to Rs 2,093.4 crore.

Sharekhan

Profit after tax (PAT) will develop 7 per cent as per Sharekhan’s estimates to Rs 2,024 crore however decline almost 5 per cent QoQ. It expects larger palm oil costs and packaging prices to lead to a 109-bps decline in gross margin. OPM to say no by ~60 bps YoY to 24.4 per cent, the brokerage stated.

“Volume growth in the domestic business is expected to be at 7-8 per cent. Strong demand for personal wash and hygiene products would help in good growth in personal care products. Home care would maintain steady performance. Nutrition business will continue to gain good traction, while tea business will grow in double digits due to price hikes undertaken,” it added.

It pegs June quarter gross sales at Rs 11,714.3 crore, up 10.9 per cent YoY however down 3.4 per cent QoQ.

Emkay Global

Organic gross sales are anticipated to develop 19 per cent on a yearly foundation to Rs 12,530.5 crore, in response to Emkay Global and three per cent, sequentially. “We expect home and personal care to grow by 16 per cent and 18 per cent, respectively. Food and refreshment business is likely to grow by 21 per cent, excluding GSK’s 33 per cent organic growth,” it stated.

Despite larger enter inflation from palm oil, tea and crude costs, the margin needs to be flat as a result of low comparables. It tasks Q1 EBIDTA margins to develop to 25.3 per cent, up 20 bps YoY and 90 bps QoQ.

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