Hindustan Unilever Limited (HUL) is expected to report flat revenue and net profit growth for Q2FY25, as weak demand continues to affect the FMCG sector. Despite this, HUL remains a major player, and for those looking to invest in stocks, it’s crucial to assess both current performance and long-term potential.
Revenue and profit growth are likely to remain muted
In the June quarter (Q1FY25), HUL reported a modest 2.2% year-on-year (YoY) growth in net profit, reaching ₹2,610 crore, and a revenue increase of 1.4% YoY to ₹15,707 crore. However, for Q2FY25, the company’s revenue is predicted to be between ₹15,542 and ₹15,825 crore, reflecting a growth of just 1% to 4% YoY. Net profit is also expected to remain flat, with estimates ranging from ₹2,580 crore to ₹2,714 crore, indicating a potential 1% to 2% decline.
For those considering whether to invest in stocks, it’s important to monitor companies like HUL during periods of stagnant growth, as their long-term strategies can still offer strong returns.
Factors influencing HUL’s Q2 performance
Several factors are contributing to HUL’s anticipated flat performance in Q2FY25. Weak consumer demand in both urban and rural areas has been a significant drag on growth. Additionally, higher advertising costs and inflation in commodity prices may have squeezed profit margins. For anyone looking to invest in stocks, such operational costs can have a notable impact on profitability, even when revenue appears stable.
Analysts will also be closely watching HUL’s operating profit margins and management commentary for any signs of improvement or strategic shifts to bolster future growth.
Interim dividend and stock performance
Alongside its Q2 results, HUL is also expected to announce an interim dividend for the fiscal year ending March 2025. The company has set November 6 as the record date for shareholders’ eligibility. Dividend payments can be a key consideration for those planning to invest in stocks, as they provide an additional income stream alongside capital gains.
Despite the upcoming results, HUL’s shares have declined recently, dropping 0.55% on the NSE to a low of ₹2,678.5. The stock has underperformed, losing 8% in the past month but remaining 7.5% higher over the past year. This mixed performance highlights the importance of conducting thorough research before deciding to invest in stocks like HUL.
Invest safely
While HUL is expected to report flat revenue and profit growth for Q2FY25, it remains a dominant player in the FMCG sector. Investors looking to invest in stocks should consider HUL's short-term challenges and long-term potential. The upcoming results and interim dividend announcement will provide further insights into the company’s strategies and future outlook.
For android only