HUL Q2 results preview: Revenue, net profit growth likely to remain flat; interim dividend announcement expected

Market experts are broadly expecting the company to post flat revenue and net profit growth for the September quarter due to tepid consumer demand in rural and urban areas.

Standalone revenue is expected in the range of ₹15,542 to ₹15,825 crore in Q2FY25, which translates into 1 to 4% growth from the year-ago levels. Net profit, meanwhile, is likely to come in anywhere between ₹2,580 crore and ₹2,714 crore, which indicates a flat to marginal drop of 1 to 2% compared to the year-ago period. Volume growth in Q2FY25 is expected to be around 5% YoY in the domestic market.

June quarter performance

For the first quarter ended June 2024 (Q1FY25), HUL met market estimates with a 2.2% year-on-year (YoY) rise in consolidated net profit to ₹2,610 crore. Revenue during the June quarter had increased by 1.4% year-on-year to ₹15,707 crore.

HUL’s volume growth stood at 4% during Q1 FY25, but it didn’t show in revenue, as the company took price cuts during the quarter to pass the benefit of lower commodity prices on to consumers.

Key monitors for Q2FY25 performance

Market observers will also be closely monitoring HUL’s operating profit margins, which are likely to take a hit during the second quarter due to higher advertising spending and inflation in commodity prices.

Management commentary around consumer demand sentiment will also be one of the key focus areas for evaluating future growth prospects. Investors will also be looking forward to any measures the company takes to revive demand in both rural and urban areas.

Interim Dividend

The HUL board will also consider the interim dividend payment for the financial year ending March 2025 in its board meeting on Wednesday.

The company has already fixed November 6 as the record date for determining the shareholders' eligibility for the interim dividend.

“The record date for the purpose of determining the entitlement of the shareholders for the interim dividend, if any, has been fixed as Wednesday, 6th November 2024,” the company said in the stock exchange filing.

HUL share price

HUL shares were trading in the red on the NSE on Tuesday extending losses for the sixth straight day ahead of the release of its Q2 results. In what could be a worrying trend for investors, HUL shares have underperformed the broader markets in the recent past.

The stock declined as much as 0.55% on the NSE to hit an intraday low of ₹2,678.5 apiece. However, the stock recovered some losses to close at ₹2,688 apiece.

In the past five trading sessions, the FMCG stock has lost nearly 4%, while declining over 8% in the past month. However, shares of HUL have gained 7.5% in the past one year while rising 0.69% year-to-date (YTD).