New Delhi: India’s largest pure-play packaged consumer goods company Hindustan Unilever Ltd., (HUL) is set to announce its first quarter earnings on Thursday. Brokerages expect HUL to report organic volume growth of 4-5% apart from improvement in gross margins due to moderation in commodity inflation.Following are the key things to watch out for in HUL earnings:Gross margins: Analysts expect the maker of Dove soaps and Kissan ketchups to report some improvement in gross margins on account of lowered commodity costs. Kotak Institutional Equities expects a marginal 55 bps quarter-on-quarter expansion in gross margin on the back of softening raw material prices. “We estimate 23.5% EBITDA margin, up 75 bps year-on-year as gross margin expansion is offset by 45 bps increase in royalty (full quarter impact) and greater intensity in advertising and promotion spends,” the brokerage said in its quarterly earnings preview on the sector. BNP Paribas expects the company to report a 165bp year-on-year improvement in gross margins to 49% and operating margins to rise 35bp year-on-year to 23.1% thanks in part to moderating input costs. The brokerage expects advertising and promotion spends at 9.5% of 1QFY24 sales, it said in a note.Volumes: Most brokerages expect the company to report volume growth of 4-5% in Q1. In the March quarter, HUL’s underlying volume growth stood at 4% year-on-year. “On the volume front we expect growth of 5% year-on-year in Q1FY24, and expect it to gradually improve, especially in H2FY24,” analysts at Nuvama Institutional Equities said.BNP Paribas expects the company to report domestic organic volume growth of 4% year-on-year, with urban markets continuing to outperform rural on the volume front. In its March quarter earnings presentation, the company had reported a "gradual improvement in volumes” for the broader FMCG industry. However, analysts will await HUL’s commentary on any meaningful uptick in rural demand that could suggest a sustained and broader recovery in rural markets. Prabhudas Lilladher estimates HUL will report a 5% year-on-year jump in June quarter volumes.Category growth and pricing: Over the last few quarters, the company initiated price cuts in soaps and laundry portfolio while increasing prices for its health food drink (HFD) brand. This could impact sales growth across the three categories the company operates in. “Steep price cuts across laundry and skin cleansing could result in lower channel inventory, impacting HUL's wholesale sales to some extent,” according to Kotak Institutional Equities.As a result, analysts expect some “moderation” in the home care segment that is likely to grow 12% year-on-year; in the fourth quarter of FY23, the category reported a 18.7% growth in revenues. Meanwhile, the beauty and personal care category is also expected to slow down sequentially owing to price cuts in soaps. However, analysts remain divided on the company’s foods and refreshments portfolio. The segment should report subdued revenue growth of 8% year-on-year given unseasonal rainfall. Unseasonal rains and a weak summer could impact the ice-cream portfolio; tea could see some consumer downgrading, analysts at Nuvama said.