​HUL Q1 earnings preview – watch out for volume growth in Q1 and commentary on demand across rural and urban​

Jul 19, 2022

By: Rounak Jain

Volume growth could finally be back

One of the concerns in the FMCG sector has been flat volumes, and that could be changing for HUL finally, say analysts. The market will keenly watch out for commentary on consumer demand trends and volume-led growth. So far most of the growth has been driven by value and price hikes.

Credit: HUL

Cosmetics and skin care pick up steam

Some analysts expect a pick up in discretionary items like cosmetics and skin care.

Credit: HUL

Ice creams could be a big contributor

ICICI Securities also said that strong, disruption-free demand for ice creams during the summer after two years could have also aided HUL’s volumes.

Credit: HUL

Covid lockdowns hurt sales for two years

For context, India was under a lockdown in the summers of 2020 and 2021 – summer falls during the Q1 of the financial year.

Credit: BCCL

Double digit growth in sales and profit

Due to the volume growth, analysts expect double-digit growth in sales and profit, with profit in the range of ₹2,200 crore.

Credit: HUL

Revenue to cross ₹13,600 crore

Analysts at Kotak Institutional Equities expect revenue to surge 14.5 percent year-on-year to ₹13,643.5 crore.

Credit: HUL

‘Ample room to premiumize’

According to Edelweiss, HUL leads in 9 out of every 10 portfolio categories, which gives it “ample room to premiumize”, essentially meaning HUL can raise prices easily.

Credit: HUL

Price hikes to boost revenue

HUL has already raised prices of its products to offset inflationary pressures, and analysts expect this to give its revenues a boost along with volume growth.

Credit: HUL

Margins could remain stressed

However, despite the strong growth expected in sales and profit, analysts state the elevated prices of raw materials like palm oil and crude derivatives could keep HUL’s margins stressed.

Credit: HUL

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