Shares of Hindustan Unilever Ltd (HUL), the country's leading fast-moving consumer goods (FMCG) player, dropped nearly 3% in intraday trade on Thursday as investors turned jittery ahead of its December quarter earnings slated to be released today. The share price of the FMCG major has fallen after rising 3.4% in the last two sessions.

Snapping two days of winning streak, HUL share price opened marginally lower at ₹2,675.20, against the previous closing price of ₹2,686.80 on the BSE. During the session, the largecap stock declined as much as 2.8% to hit an intraday low of ₹2,612.10. The market capitalisation of the country’s fifth most valued firm stood at ₹6.14 lakh crore. HUL shares touched a 52-week high of ₹2,741 on December 9, 2022, while it hit a 52-week low of ₹1,901.80 on March 8, 2022.    

HUL has underperformed the BSE FMCG index in terms of one year returns. The sectoral leader has gained 11% in the last 12 months as compared to 16.5% rise in the BSE FMCG index. The stock has given a muted return of 2% in a six month period, while it has fallen 3.7% in a month. In the last one week, HUL shares have gained 1.5% as compared to 2% rise in the BSE benchmark Sensex.

FMCG major, HUL is widely expected to report double-digit growth in both profit and revenue on yearly basis, but sequentially the top and bottom lines are likely to be muted due to inflation headwinds.

ICICI Direct, in its Q3 preview report, projected HUL to register sales growth of 12.6%, aided by pricing growth. It expects the company's gross margin to fall by 392 bps YoY and operating margins to drop by 82 bps during the quarter under review.

“We estimate 5% volume growth & 7% pricing growth during the quarter. Home care is expected to witness 23% sales growth given the company has taken price hikes in the last one year. Further, detergent has continued to see strong volume growth. Beauty & personal care segment is estimated to post 5.3% sales growth as the company has passed on benefits of palm oil price decline in terms of price cuts in soaps in October 2022. Food & refreshment segment is expected to see growth of 2.3% mainly due to price deflation in the tea segment," it said in a report.

In the second quarter ended September 30, 2022, HUL delivered strong performance despite challenging demand environment with inflationary pressure. The FMCG giant reported a 19.6% YoY growth in standalone net profit at ₹2,616 crore as compared to ₹2,187 crore in the year-ago period. On a sequential basis, the profit rose 14% from ₹2,289 crore in the June quarter. The revenue from operations rose 15.9% YoY to ₹14,751 crore, while EBITDA for the quarter stood at ₹3,479 crore, up 8% YoY. The company also declared an interim dividend of ₹17 per equity share for the financial year ending 31 March, 2023.

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