HUL Q1 Results: Numbers meet expectations on most parameters; volume growth key

India's largest FMCG company, Hindustan Unilever Ltd. reported its June quarter results on Thursday, July 31. The results come at a time when the street believes that the worst is over for the sector.

Revenue for the quarter increased by 3.9% from last year to ₹15,931 crore, which is in-line with the CNBC-TV18 poll estimate of ₹15,945 crore. A CNBC-TV18 poll had expected a 4% revenue growth for the quarter.

Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) for the quarter declined by 1.3% from last year to ₹3,558 crore, which is marginally below the ₹3,595 crore estimate, while the net profit increased by 7.7% from last year to ₹2,732 crore.

EBITDA margins for the quarter contracted by 120 basis points to 22.3% from 23.5% last year, while the CNBC-TV18 poll had projected a 100 basis points pressure from the same quarter last year.

At the end of the March quarter, HUL had highlighted that growth in the first half of the current financial year is likely to be higher than the second half of the previous financial year.

The management had also mentioned that EBITDA margins are likely to remain in the 22% to 23% range over the next few quarters, while gross margins may see moderation.

Volume growth, which is a key metric for HUL, is likely to be between 3% to 4%, according to the CNBC-TV18 poll.

Commentary on demand, outlook on the strategy of the new management and steps to revive volume growth are some of the key factors to watch from the HUL management. Speaking of management, HUL will now have a new MD & CEO in Priya Nair, who will take charge after incumbent Rohit Jawa's term completion.

Shares of Hindustan Unilever have recovered from the lows of the day, but are currently trading little changed at ₹2,441.4. The stock has risen 6.5% in the last one month ahead of the results.