Q3FY23 Preview: HUL: Revenue seen at Rs149,775 million, PAT at Rs25,058 million

18 Jan 2023 , 09:18 AM

Result date: 19^th January, 2023

Recommendation: Add

Target price: Rs3,050

Hindustan Unilever (HUL) is likely to post volume growth of 4% over the year-ago quarter. This is in line with volume growth that the company reported in previous quarter, but higher than the 2% growth reported in Q3FY22. Overall sales growth would be 13.5%, which implies a pricing growth of 10%.

The 3-year CAGR translates into organic volume growth of 3.3% versus 3.0%/2.1% in Q2FY23/Q1FY23. 

Analysts at IIFL Capital Services forecast 180 basis points contraction in EBITDA margin over the year-ago quarter, translating into EBITDA growth of 6%. EPS to grow at 7% on a year-on-year basis.

The company is likely to post Profit After Tax (PAT) growth of 6.8% over the year-ago quarter. 

Important management insights to watch out for:

• Improvement in rural business
• Outlook on raw material costs
• Update on consumption trends seen in nutrition, out-of-home and discretionary categories
• Strategy on new product launches
• Sustainability of cost-saving initiatives

 

Rs Million	December 2022 estimates	YoY change
Revenue	149,775	13.5%
EBITDA	36,060	5.8%
Profit After Tax	25,058	6.8%

Source: IIFL Research