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HUL m-cap crosses Rs 3 trillion; hits new high ahead of Q3 results

The stock hit a new high of Rs 1,388, up 1.6% on BSE ahead of third quarter results on Wednesday, January 17, 2018.

SI Reporter  |  Mumbai 


(HUL) hit a new high of Rs 1,388, up 1.6% on BSE in early morning trade, ahead of third quarter results of the current financial year (Q3FY18) on Wednesday, January 17, 2018.

The market capitalization (m-cap) of the fast moving consumer goods company touched first time Rs 3 trillion in intra-day trade. At 09:50 AM; the stock was trading 1.3% higher at Rs 1,385, with m-cap of Rs 2.99 trillion, the BSE data shows.

Analysts expect a volume growth of in the range of 6% to 11% and EBITDA (earnings before interest, tax, depreciation and amortization) expansion of between 125bps and 320bps for Q3FY18.

“We expect HUL to record a volume growth of around 11% on a base of negative 4% reported in Q3FY17 (Q2FY18 saw volumes growth of 4% year on year (yoy) on a base of negative 1%),” Edelweiss Securities said in Q3FY18 results preview.

Volume growth is likely to be stronger on the back of soft base of negative 4%; wholesale trade channel rebalancing; CSD (canteen-store-departments) channel also coming back to almost normalcy; and MT (modern trade) and cash and carry channel continuing its good run. On EBITDA margins front, the brokerage firm expect around 125bps expansion (lower when compared to previous quarters), it added.

Analyst at Emkay Global Financial Services expects HUL to report 8% volume growth and overall revenue to grow by 9.7% yoy to Rs 84.5 billion. Growth will be led by Home Care (Soaps and Detergents) and Beverages portfolio.

We expect margin improvement traction to continue driven by Detergents. We expect softening of commodity prices will lead to 240bps yoy improvement in gross margins to 53.8%. EBITDA margin expected to improve by 320bps yoy to 20.8%, added report.

“HUL is expected to report 9% increase in sales on 6% increase in volumes. We estimate 320bps margin expansion and EBITDA at Rs 17.47 billion. The cost efficiency gains and premiumisation will continue to drive margin expansion,” the brokerage firm Prabhudas Lilladher said in results preview.

First Published: Wed, January 17 2018. 00:42 IST