Synopsis
Hindustan Unilever Ltd is set to reveal its third-quarter financial results. Revenue growth is anticipated to be modest. Adjusted profit after tax may see a slight decrease. This is due to changes in the Goods and Services Tax regime. Demand stabilization is showing early signs. Investors will watch for management insights on rural recovery and pricing power.
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Agencies HUL Q3 seen muted as GST transition weighs on growth Consumer goods major Hindustan Unilever Ltd (HUL) is expected to report a muted set of numbers for the third quarter, with revenue growth remaining modest despite some early signs of demand stabilisation. According to an average of six brokerages, revenue is likely to rise about 3% YoY, while adjusted PAT is seen declining around 3% YoY due to a transitional hit from the revamped GST regime.
Brokerages including Centrum and Nuvama note that the first half of Q3 was impacted by GST rate rationalisation, which affected roughly 40% of HUL’s portfolio. However, channel normalisation after November 10 and winter season demand are expected to provide some support in the latter half.
This will be the first full quarter where reported numbers exclude the ice cream business, making like-to-like comparisons critical. On a standalone, like-for-like basis, most brokerages expect volume growth of 2% to 3% YoY, reflecting gradual recovery after GST-led channel disruptions in the early part of the quarter.
On a like-to-like basis, revenue growth is estimated at 3% to 4% YoY, driven by 2% volume growth and low single-digit pricing. Categories such as soaps and tea are expected to see relatively better traction due to a favourable base. Beauty and personal care could outperform home care, where price cuts may offset volume gains.
Margins present a mixed picture. The reported EBITDA margin is expected in the 23% to 23.5% range, supported by the demerger of the lower-margin ice cream business, which provides a 50 to 60 bps tailwind. However, on a pure like-to-like basis, margins are seen largely flat or slightly lower YoY due to weak operating leverage, higher royalty and promotional spends, and GST-related channel adjustments.
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