FY22: HUL may achieve revenue growth of up to 11% per annum

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FMCG major Hindustan Unilever Limited (HUL) FY22 is likely to achieve annual revenue growth of up to 11 percent in the October-December quarter.

FMCG major Hindustan Unilever Limited (HUL) FY22 is likely to achieve annual revenue growth of up to 11 percent in the October-December quarter. The company’s third-quarter earnings will be reported on Thursday, January 20, 2022.

Analysts say the key areas to look at are our progress in rural business, recovery in personal care, pricing operations, and new launch strategies. And the sustainability of cost-saving enterprises. They also estimate PAT growth of up to 19 percent per year. 

During the October-December period, HUL’s stock fell 12.6 percent, while the S&P BSE Sensex and BSE FMCG index fell 1.5 percent and 7.3 percent, respectively. HUL has fallen more than 2 percent in the past year, from about 2 percent in the previous month. HUL fell four percent in six months.

HDFC Securities: The research firm expects 8% annual revenue growth with 2% volume growth. It sets an annual growth rate of 8/9/5% for home care, BPC, and the food business, respectively. RM inflation for the quarter led to a 138 bps YoY drop in GM (-24bps in Q3FY21 and -142bps in Q2FY22). “EBITDA margin is expected to increase to 32bps

Up from 24.4% year-on -87bps in Q3FY21 and -46bps in Q2FY22). EBITDA will grow at 9% per annum,” it said.

ICICI Securities: The price hike in the Home Care & Beauty & Personal Care segment (BPC) was the main reason for HUL’s 10.6% revenue growth. Homecare, BPC, and Foods Business forecast sales growth of 11.8%, 9%, and 6.9% for the quarter, respectively. With a steady increase in the price of major raw materials (palm oil, crude-based packaging costs), total margins are expected to shrink by 202 bps.

Edelweiss Securities: The research firm estimates that revenue, EBITDA, and PAT grow by 10%, 13.4% year-on-year, and 19% year-on-year, respectively. In the Q3FY21 base quarter, earnings increased by 20.9% year-on-year and EBITDA by 16.7% year-on-year. HUL expects 2-3% annual growth on a 4% basis (Q2FY22 achieved 4% volume growth on a 1% basis).

Thus, in two years, revenue growth was 33.1% and EBITDA growth was 32.4%. “Rural demand is slowing down a bit and the health and hygiene sector is in moderation as expected. Discernment and out-of-home witnessing progress. We estimate price growth of 8-9% per annum, “he added.” Much of the increase in tea prices will end this quarter.

Ambit Capital: It expects HUL to achieve 10-11% year-on-year revenue growth sustainability even after long-term positives of infiltration improvement and premiumization.

However, on the other hand, the portfolio offers excellent growth forecasts; “It gets even stronger when we add factors such as the distribution network and the optimal use of data analytics,” it says.

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