HUL Q3 Review - Surprise Royalty Increase To Offset The Tailwinds From Positive Mgmt Commentary: Systematix

BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy. .Systematix Research Report.Hindustan Unilever Ltd. delivered an in-line performance with revenue/Ebitda/profit after tax growth of 16%/8%/13% YoY respectively. Volume growth of 5% was a marginal positive surprise given industry volume decline of 4%. A combination of growth leverage, cost controls and calibrated price hikes limited the decline in Ebitda margin to 180 basis points. With a 11% pricing impact against a material inflation of 18% in Q3, gross margin dipped 460 bps YoY, albeit it was a 170 bps QoQ improvement. We expect HUL's gross margin to see a gradual normalisation, with commodity inflation continuing to moderate and premiumisation and scale leverage playing out. But Ebitda margins improvement will be tempered by the 80 bps phased increase in royalty and an uptick in ad spends. We expect a rural recovery led by lower inflation, low base and better farm income expectations while urban demand especially in personal care and health food drinks categories should also see the benefits of innovation and market development. Hence, we expect volume growth trends to improve over the next couple of quarters..Click on the attachment to read the full report:.HUL Raises Royalty Payout To Parent, Analysts Say Won't Hit Margin Much.DISCLAIMERThis report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

HUL Q3 Review - Surprise Royalty Increase To Offset The Tailwinds From Positive Mgmt Commentary: Systematix

HUL delivered an in-line performance with revenue/Ebitda/profit after tax growth of 16%/8%/13% YoY respectively.

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