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Slow rural demand, price cuts and increases in local competition are likely to impact Fast-Moving Consumer Goods major Hindustan Unilever Limited(HUL) is expected to see muted revenue.
According to analysts, negative pricing growth could impact the company and lead to a oneper cent growth in the consolidated revenue of the company.
HUL is expected to post 3.5 per cent growth in its Profit After Tax(PAT) year/on-year.
“While the urban sector was leading growth for the FMCG market by threeper cent YoY, the rural sector’s demand remained subdued. The demand trend is expected to remain stable in Q3FY24, with market volumes recovering to mid-single digit level compared to their base period figures due to continued market share. The price growth might tail off, given the lower input costs which FMCG players continue to pass to their customers. Heightened competition in the industry and volatile global prices may keep the volume recovery gradual. The food and refreshment segment might decline due to sustained input cost inflation in the coffee and health food drinks (HFD) category. When analyzing segment performance, Home Care and BPC may post single-digit revenue growth compared to Food and Refreshment due to inflation in input prices in the segment,” said Parth Shah, Research Analyst, StoxBox.
According to IIFL Securities, the company will witness a byline growth of twoper cent in the December quarter year-on-year.
“Slowing demand in rural markets coupled with increased competitive intensity are likely to weigh on volume growth during the quarter. Elevated levels of ad spending and royalty payments will be key pressure points on the company’s margins during the year.EBITDA margin could moderate sequentially to 24.5 per cent versus 24.8 per cent in the September quarter,” mention IIFL Securities.
Earlier, the company had reported ₹.2,657 crore net profit for the quarter ended in September 2023. Revenue from operations grew threeper cent to ₹15,340 crore during the period while volumes grew twoper cent.
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