Hindustan Unilever (HUL), the country’s largest fast moving consumer goods (FMCG) maker, is expected to post flat sales growth for the fourth quarter of fiscal year 2013-14, which ended on March 31.
HUL is considered the barometer of consumer spends in the country and a poor performance by the company will indicate weak consumer sentiment.
The maker of brands such as Lux, Fair & Lovely, Dove and Sunsilk is expected to see volumes grow by 3 per cent compared to 4 per cent growth in the previous quarter, as FMCG sales weaken, say analysts.
The company’s volume growth has remained subdued over the last five to six quarters.
Reports by Motilal Securities, Edelweiss and Kotak Securities indicate that HUL’s revenue growth for the quarter is expected to remain under pressure as consumers cut down on discretionary spends in the face of rising inflation and a struggling economy.
Besides, factors such as high advertising spends by the FMCG giant and price hikes during the quarter will impact revenue growth.
An Edelwiess report states that volume deceleration is expected amidst high competitive intensity in detergents and toothpaste.
Segment-wise analysis by the brokerage firms indicated that while soaps and detergents would see some improvement in pricing due to material inflation, personal products would continue to face a challenge even as industry data has indicated a moderation in the growth for oral-care and skin-care products.