Mumbai: Hindustan Unilever Ltd (HUL), the country’s largest consumer packaged goods company by sales, will announce its second quarter earnings on Wednesday.
The parent Unilever Plc., which announced its results earlier this month, had warned of slowing sales in its Indian unit on the back of rising prices dampening consumer demand in the September quarter.
For the last two quarters, HUL, the bellwether of the consumer goods market, has maintained volume growth of 4%.
So does the warning signal further deterioration in volume-led sales growth?
It would also be interesting to note the price increases by the maker of Knorr Soup and Surf detergents to assess whether it signals a return of price-led growth over volume-led growth going forward as commodity prices increase.
The margins of the company will also be watched. Has the company managed to widen the same in the September quarter? If yes, does this mean that the company is willing to sacrifice volume growth in favour of margins?
Then there is spending on advertising and promotions to watch for and whether it has led to any significant improvement in sales. Is competitive threat from companies like Baba Ramdev’s Patanjali Ayurved Ltd also impacting its sales? Has the competitive intensity in the Indian market increased?
Lastly, given that HUL’s volume growth has been subdued in the last 14 quarters, it will be interesting to know what the company will do to change it. Or whether it is the new normal for the company?