ITC, HUL hit new high on hopes of strong Q2 earnings

ITC and Hindustan Unilever (HUL) have touched their respective lifetime highs on expectation of strong net profit growth for July-September 2012 quarter (Q2).

ITC is trading higher by 1.4% at Rs 287 and HUL by around 1% at Rs 579 on the Bombay Stock Exchange. ITC will announce its Q2 results on October 19, 2012, while HUL yet to declare the date of results.

Analyst at Motilal Oswal Securities expect ITC to post 16% sales growth (1% cigarette volume growth) and around 17% net profit growth; while HUL’s sales are likely to grow 15% (8% volume growth) and 19% net profit growth for the quarter ended September 2012 over the corresponding quarter of pervious year.

 

“The operating margin for fast moving consumer goods (FMCG) companies is likely to increase by 50 bps year-on-year (YoY), muted as compared to the previous quarter (up 150bps YoY), given that the intensity of price hikes has reduced on account of stable input prices and lower advertisement and promotion spends,” said Religare Institutional Research in report.