How to trade in Hindustan Unilever ahead of its Q1 results?

According to experts, HUL is expected to post volume-driven growth in the June quarter. This will be supported by a recovery in rural demand and high demand for products associated with the summer season.

In addition, HUL could report revenue in the range of ₹15,200 crore to ₹15,250 crore, registering a growth of 1%-3% on an YoY basis. The company reported revenue of ₹14,857 crore in Q4FY24.

Meanwhile, HUL's net profit could remain in the range of ₹2,500 crore to ₹2,600 crore, up 2% to 3% YoY. In Q4FY24, the company reported a net profit of ₹2,406 crore. Further, the company's EBITDA could grow by 2% to 3% YoY to ₹3,600 to ₹3,750 crore, while the EBITDA margin could improve by 40 to 70 basis points.

Last week, HUL's board approved the sale of its water purification business to AO Smith India for ₹601 crore. During the results announcement, investors and traders will be keenly watching the rural demand scenario, volume growth, management's take on prices of key commodities like crude oil and gross margin expansion.

Ahead of the Q1 result announcement, HUL shares ended the day in green at ₹2,732, up 0.2% and are up 2.9% year-to-date.

Technical view

The FMCG major has gained over 22% since April 2024 and is in an uptrend on both the weekly and daily charts. Shares ended last week on a positive note, closing above the high for the third consecutive week.

As you can see in the chart below, HUL is currently trading above all its short-term moving averages (20 and 50) and recently close above the previous swing high of 2,723. The index has immediate support around its 20-day moving average and the resistance is around 2800, closer to its previous all-time high.

To get a clearer perspective on price behaviour, let's look at how Hindustan Unilever’ share price has performed over the last four quarters around its earnings announcements.

Options strategy for Hindustan Unilever

With the options market predicting a price movement of ±3% ahead of the July 25 expiry, traders can consider long and short straddle strategies to take advantage of the expected volatility.

Derivatives trading must be done only by traders who fully understand the risks associated with them and strictly apply risk mechanisms like stop-losses. The information is only for educational purposes. We do not recommend any particular stock, securities and strategies for trading. The stock names mentioned in this article are purely for showing how to do analysis. Take your own decision before investing.