Since July 16, 2018, post-June quarter results (Q1FY19), HUL had underperformed the market by falling 13%, as compared to 6.4% decline in the S&P BSE Sensex.
FMCG major had reported a 19.17% increase in standalone net profit at Rs 15.29 billion for Q1FY19, led by underlying volume growth of 12% and sustained margin improvements.
Analysts at Motilal Oswal Securities except Hindustan Unilever’s revenue to grow 15% year-on-year (YoY), with underlying domestic volume growth (UVG) of 10% in Q2FY19. The net profit is likely to grow 22.4% YoY to Rs 15.1 billion.
“We model 15% revenue growth in domestic FMCG business (comparable) aided by 10% UVG and 5% price-led growth; this implies a 2-yr UVG CAGR of 7%. On a segmental basis, we bake in 17% and 14% YoY revenue growth for Home Care and Personal Care, respectively,” Kotak Securities said in the Q2FY19 earnings preview.
We expect EBITDA margin to expand 230 bps YoY aided by 100 bps expansion in GM. Impact of higher A&P intensity will be partly offset by cost efficiencies and operating leverage benefits, it added.
Prabhudas Lilladher estimates 12% sales growth on 9% volume growth and 12.6% net profit growth. “The margin expansion to remain modest. We would watch out for anti-profiteering order and crude price inflation,” the brokerage firm said in earning preview.