HUL, ITC, Nestle: Here's How These 3 FMCG Giants Are Expected To Perform In Q2FY24

Three leading FMCG giants namely Hindustan Unilever Ltd, Nestle India Ltd, and ITC Ltd are scheduled to declare their September quarter results for financial year 2024. Accordingly, these three stocks will also see major movements on Thursday's trading session.

Ahead of the results, HUL shares witnessed a decline of 0.37% on BSE to close at Rs 2547.90 per share on Wednesday. HUL stock is trading 7.97% down from its 52-week high price of Rs 2768.50. Large cap FMCG company Nestle shares also saw a fall of 0.21% in trade today to end at Rs 23,269.65 apiece on BSE. Nestle shares are trading 1.42% down from 52-week high price of Rs 23,599.00 per share. Meanwhile, ITC shares also fell by 0.42% intraday on BSE to Rs 451.55 per share today. ITS stock is currently trading 9.62% below from 52-week high value of Rs 499.60.
Here's what to expect from these 3 FMCG giants in Q2FY24:

1. Nestle Ltd: Nestle is expected to see its revenue growth at 13% y-o-y to Rs 5165 crore, led by mid-high single-digit volume growth. India business is likely to report ~12% y-o-y growth, while the international business is expected to grow by ~15% y-o-y. Gross margin/OPM is expected to improve by 220/190 bps y-o-y, largely due to the softening of raw-material prices. Meanwhile, adjusted PAT is likely to soar by 24% y-o-y at Rs 831 crore, according to brokerage firm Sharekhan.

Meanwhile, leading brokerage house, Prabhudas Lilladher said, "We expect revenues to grow by 12.5% led by 6.5% volume growth and impact of late diwali. Gross margins to improve by 211bps YoY. EBITDA margins expected to improve by 117bps YoY at 23.1%. EBITDA expected to grow by 18.5%, while PAT to grow by 20.3% YoY.
Earlier this month on October 3, Nestle issued its BSE filing informing shareholders about Board Meeting to be held on 19 October, 2023 to consider financial statements for the period ended September 2023.

Earlier, in its regulatory filing dated October 3, 2023, Nestle said, "The Board of Directors will also consider the following proposals: - declaration of the second interim dividend for the year 2023, if any....Second interim dividend for the year 2023, in the case declared, shall be paid on and from 16th November 2023; and - alteration in the share capital of the Company by sub-division/ split of existing equity shares having face value of Rs 10/- each, fully paid up, as may be determined by the Board of Directors."

For the second interim dividend, Nestle has already fixed a record date on November 1 to determine eligible shareholders for the benefits.

Nestle shares surged 1.22% in last 2-weeks, gained 20.04% in last 1-year, and rallied 139% in last 5-years.

2. Hindustan Unilever Ltd: According to Sharekhan, Revenue is expected to grow by ~4% y-o-y to Rs 15,317 crore, aided by 6%/2%/5% y-o-y growth in the homecare/personal care/foods and refreshments categories. Volume growth is expected to be at 3-4%. Meanwhile, gross margin is expected to be higher by 370 bps y-o-y, aided by softening of raw-material prices. However, OPM is expected to be up by just ~60 bps y-o-y due to higher advertisement and other expenses. Adjusted PAT is expected to be declared at Rs 2539 crore, up 6.4% YoY. PAT is expected to grow by ~6% y-o-y, in line with ~6% y-o-y operating profit growth.

Earlier this month on October 5, HUL issued its regulatory filing stating, "Board of Directors of the Company will be held on Thursday, 19th October, 2023, inter alia, to consider the Unaudited Standalone and Consolidated Financial Results for the quarter and half year ended 30th September, 2023 along with the Limited Review Report of the auditors for the corresponding period; consider the proposal for payment of Interim Dividend, if any, for the Financial Year ending 31st March, 2024."

The company fixed November 2, 2023 as the record date for the purpose of determining the entitlement of shareholders for the Interim Dividend.
HUL shares declined 0.31% in last 1-week, gave return of 2.43% in last 1-month, fell 2.07% in last 1-year, and gave 18% return in last 3-years.

3. ITC Ltd: The company's cigarette business revenue is expected to be up by 9% y-o-y, aided by 5-6% volume growth, while the non-cigarette FMCG business is expected to grow by 15% y-o-y. The hotel business is expected to grow by 16% y-o-y, aided by sustained strong demand. Paper business is likely to grow by 4% y-o-y, while the agri business is likely to decline by 10% y-o-y. Meanwhile, gross margin/OPM is expected to improve by ~185/150 bps y-o-y, largely due to the softening of raw-material prices, according to Sharekhan.

Adjusted PAT is likely to be declared at 4,793 crore, up 7.3% YoY in line with 5% y-o-y growth in operating profit. PAT is expected to grow by 7% YoY.

Earlier this year on October 5, 2023, ITC announced October 19 as the date to consider and approve unaudited standalone and consolidated financial results of the company along with the segment-wise revenue, results, assets and liabilities for the quarter and six months ended September 30, 2023.

ITC shares gained 0.74% in last 1-week, soared 3.57% in last 2-weeks, fell over 4% in last 3-months, and offered 33% return in last 1-year. ITC shares gained 172% in last 3-years.

Meanwhile, Prabhudas Lilladher expressed his opinion on the FMCG sector and said, "We estimate our coverage universe (ex-ITC) to report Sales, EBIDTA and PAT growth of 10.2%/16.5%/10.8% YoY (8.6%/13.7%/11.1% including ITC) due benefits of soft commodity prices despite slow pick up in rural demand, even as urban demand remained resilient. APNT (Asian Paints), KNPL (Kansai Nerolac Paints Ltd), CLGT, PIDI and NEST will have strong profit growth due to meaningful margin expansion."

Disclaimer: The recommendations made above are by market analysts and are not advised by either the author or Greynium Information Technologies. The author, the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.