HUL Q2 Review - Volume Growth Disappoints; Gross Margin To Remain Under Pressure Near Term: Systematix
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Systematix Research Report
Hindustan Unilever Ltd.’s Q2 FY22 results were largely in-line with estimates; however, volume growth at 4% YoY (on a low base of 1% YoY) was below our estimates of 8% YoY.
On a two-year compound annual growth rate basis, volume growth improved sequentially from 0.1% in Q1 FY22 to 2.5% in Q2 FY22.
rural growth moderated significantly in August-September 2021 versus the January-July 2021 period, as per Nielsen,
the management remains cautiously optimistic about near term demand; would wait a couple of months to understand the underlying demand trends,
gross margin is likely to remain under pressure due to continued raw material inflation,
HUL will mitigate raw material inflation through calibrated price increases, mix improvement and cost-saving measures.
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