Latest news with #Nuvama
Mint
3 hours ago
- Business
- Mint
HUL Q1 preview: Volume growth seen at 2-4% amid weak demand, margin pressure
New Delhi: Hindustan Unilever Ltd (HUL) is set to announce its June-quarter earnings (Q1FY26) on Thursday, with analysts projecting volume growth of 2-4% amid tepid demand and a weak seasonal backdrop. A Bloomberg poll of 11 analysts estimates Q1FY26 consolidated profit at ₹ 2,610 crore on revenue of ₹ 16,080 crore. Standalone profit is expected at ₹ 2,580 crore, with standalone revenue at ₹ 15,960 crore. Nuvama Institutional Equities expects HUL's underlying consolidated volumes to rise 3-4% year-on-year (YoY). Motilal Oswal projects a 3% increase in domestic volumes. Jefferies forecasts revenue growth to reflect 2% volume growth and 1% pricing growth, aided by price hikes in soaps and tea taken in the previous quarter. HUL has struggled to sustain volume growth in recent years. In FY25, volumes rose just 2%, as inflationary pressures and intensifying competition weighed on segments like beauty, personal care, and packaged foods. The laundry business, however, remained resilient. In the March quarter, the company posted a net profit of ₹ 2,493 crore, up 3.6% year-on-year, though down sequentially due to a one-time gain from the sale of its Pureit business. Volume growth was 2%. At the time, management said urban markets remained stressed as inflation outpaced wage growth, while rural recovery continued steadily. Demand across the fast-moving consumer goods (FMCG) sector remained broadly stable compared to the March quarter, analysts said, with rural markets continuing to recover gradually. Jefferies estimates overall FMCG volume growth under its coverage to reach 3% in Q1FY26, slightly higher than the previous quarter. For the June quarter, HUL—maker of Lux soaps and Knorr soups—is expected to report a 4.3% increase in consolidated revenue, supported by volume growth of 3-4%, according to a July note by Nuvama. However, consolidated earnings before interest, tax, depreciation and amortization (Ebitda) are projected to decline 1.4% YoY. Gross margin is seen shrinking to 50%, and Ebitda margin to 22.8%, as the company continues to pass on cost benefits to consumers in line with earlier guidance. At 22-23%, Ebitda margin guidance remains intact, Nuvama said. Palm derivative costs, including palm fatty acid, were higher year-on-year but have softened sequentially, with further easing expected in the second quarter, Nuvama analysts said. 'Demand trends show a gradual recovery, with HUL's guidance of H1FY26 outperforming H2FY25 proving accurate, supported by favourable macro indicators,' analysts at Nuvama Institutional Equities said. Rural demand remains resilient, while green shoots are emerging in urban markets, they said. For the June quarter, pricing growth is expected to remain muted at around 0.5%, driven by hikes in soaps and carry-forward increases in tea and coffee. 'HUL has also increased investments across business segments, including ATL consumer promotions, strategic interventions, and distribution, with advertising and promotions (A&P) expected to be 9.4% of sales,' Nuvama said. Analysts also flagged a likely dip in profit due to costs linked to HUL's acquisition of skincare brand The Minimalist. The broader FMCG sector is showing signs of improvement, though unseasonal rains during the quarter disrupted demand in several summer-linked categories. According to recent estimates from Kantar, FMCG growth slowed to 3.9% in the 12 months ending June 2025, led by a sharp decline in food sales and summer-centric products such as bottled beverages, talcum powders, sunscreen, and ice cream. Household care—especially laundry liquids—continued to perform strongly. Motilal Oswal expects domestic volumes to rise 3% in the June quarter, supported by rural strength. 'Demand trends in Q1FY26 remained consistent quarter-on-quarter with muted growth, as rural areas continued to outperform urban areas, contributing to an expected revenue growth of 4.6%. Gross profit margins are anticipated to face pressure, contracting by 140 basis points year-on-year to 50.6%, due to increased consumer offers and initiatives aimed at driving volume growth, aligning with the company's revised EBITDA margin guidance of 22–23% from the earlier 23–24% range,' Motilal Oswal said. While HUL continues to face headwinds from input cost inflation and sluggish seasonal categories, analysts expect its steady expansion in rural markets and stepped-up brand investments to offer some support in the quarters ahead. The earnings come amid a leadership transition at the company. CEO Rohit Jawa will step down on Thursday, concluding a two-year tenure. Priya Nair, currently president of Beauty & Wellbeing at parent company Unilever, will take over as managing director and chief executive on 1 August for a five-year term.
Mint
5 hours ago
- Business
- Mint
Textile, pharma to jewellery — Top sectors that may feel the pinch first from Trump's 25% tariff on India
Trump tariffs on India: US President Donald Trump on Wednesday declared a 25 per cent tariff on Indian goods, effective August 1, citing India's "obnoxious" trade barriers and close ties with Russia for defence and energy. The move, though not entirely unexpected, has triggered unease among Indian policymakers, exporters, and market participants, given the ambiguity around additional penalties Trump promised for India's Russian transactions. In a press statement, Trump referred to India as a 'friend' but argued that it imposes some of the highest tariffs on US goods and continues to enforce non-tariff barriers that are "unreasonable." He added that India's energy and defence cooperation with Russia, especially amidst the ongoing Ukraine war, 'empowers Moscow' and must be penalised. However, the details of the penalty for these transactions were not disclosed. In its first response to the announcement, the Indian government stated that it had 'taken note' of the new duty and is 'studying its implications.' It reiterated its commitment to a 'fair, balanced, and mutually beneficial' trade agreement with the US, signalling hope that diplomacy may temper the impact. Industry experts believe the immediate impact will be most visible in export-heavy sectors. Colin Shah, MD at Kama Jewellery, said the decision comes as a 'big blow' to India's gem and jewellery industry, one of the country's largest export contributors. 'The US is a critical export market. A 25 per cent tariff is bound to reduce the competitiveness of Indian goods, especially gems and jewellery, which are already under pressure due to prolonged geopolitical tensions involving Russia, Ukraine, and the Middle East,' Shah noted. He further added that Trump's return to political prominence and his unpredictable stance on trade have reignited uncertainty in Indian markets. 'We expect trade with the US to remain muted in the near term. However, all eyes are now on the sixth round of India-US Bilateral Trade Agreement talks, scheduled for late August, which may provide clarity,' Shah said. Meanwhile, Nuvama has also cautioned that India's export-driven sectors may face turbulence. In its latest commentary, the brokerage estimated that India's goods exports to the US — valued at approximately $87 billion — could be significantly impacted. These exports account for nearly 20 per cent of India's total goods exports and around 2.5 per cent of GDP, underlining the weight of the US as a key trading partner. While the direct blow to India's GDP may be limited due to the modest overall share of US exports in the country's economic output, the implications across sectors such as textiles, pharmaceuticals, electronics, agri-products, and machinery are likely to be substantial, Nuvama said. Nitin Bhatt, Technology Sector Leader, EY India, said, 'While the Indian IT services sector isn't directly hit by the newly announced 25% US tariffs, the ripple effects could be substantial. Rising input costs may prompt US companies to scale back discretionary tech spending. Simultaneously, growing unease around workforce mobility and evolving digital taxation frameworks could redefine how cross-border services are priced and delivered.' Nuvama further noted that these developments may heighten investor caution. The elevated tariffs could lead to increased risk aversion among foreign institutional investors, especially at a time when India's domestic consumption remains subdued. Sectors such as pharma, auto ancillaries, industrials, and tiles — which are heavily reliant on US demand — could witness notable volatility. Small- and mid-cap segments, along with high-beta sectors like real estate and NBFCs, might see more intense pressure due to the risk of capital outflows. On the contrary, a depreciating rupee may benefit IT services firms, which tend to perform well in weak currency environments. Given that IT valuations are currently subdued, Nuvama expects this space to potentially outperform in the near term. Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
Economic Times
5 hours ago
- Automotive
- Economic Times
Mahindra & Mahindra shares in focus after Q1 profit jumps 24% YoY to Rs 4,083 crore. Should you buy, sell or hold?
Shares of Mahindra & Mahindra (M&M) will be in focus on Thursday after the company reported a 24% year-on-year rise in its consolidated net profit to Rs 4,083 crore for Q1FY26, compared to Rs 3,283 crore in the same quarter last year. ADVERTISEMENT Revenue for the quarter stood at Rs 45,436 crore, up 23% from Rs 37,010 crore in Q1FY25. On a sequential basis, profit rose 24% from Rs 3,295 crore in Q4FY25, while revenue increased 7% from Rs 42,586 crore. The company posted strong operational performance across segments, with the auto and farm equipment businesses continuing to drive growth and maintain margins, leading to a 20% rise in profits, according to a company statement. M&M retained leadership in the SUV segment, achieving a 27.3% revenue market share—up 570 basis points YoY. SUV volumes grew 22% during the quarter. In the LCV (3.5T) category, the company held a 54.2% market share, up 340 the farm segment, M&M claimed a 45.2% market share in tractors, up 50 bps YoY, and a 38.7% market share in electric three-wheelers. ADVERTISEMENT Nuvama has maintained a 'Buy' rating with a target price of Rs 3, brokerage expects the auto segment to clock a 14% CAGR between FY25–28E, driven by strong demand and new model launches. The farm segment is projected to grow at 10% CAGR, aided by market share gains and supportive policies. It also forecasts a 13% CAGR in revenue and core earnings, with RoIC expected to stay above 55%. The target price is based on 25x September 2027 core EPS. ADVERTISEMENT Avendus has also retained a 'Buy' rating but revised its target price to Rs 3,650 from Rs 3, firm is optimistic about M&M's EV plans via Born EV platforms BE 6 and XEV 9e. The core ICE business is expected to remain resilient, backed by capacity expansion and a strong order book. Automotive volume CAGR is projected at 19% for FY25–27E, while tractor volume is expected to grow at a mid-single-digit rate. However, rising EV contribution may pressure margins. The target price is based on a 27x FY27E EPS under the SOTP valuation model. ADVERTISEMENT (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times) (You can now subscribe to our ETMarkets WhatsApp channel)
Business Upturn
6 hours ago
- Business
- Business Upturn
Avenue Supermarts eyes 10–15% store growth; Nuvama maintains hold with 6% upside amid valuation caution
By News Desk Published on July 31, 2025, 08:17 IST Nuvama Institutional Equities has retained its hold rating on Avenue Supermarts while raising the target price to ₹4,544 from ₹4,086. This implies a limited upside of around 6% from the current market price of ₹4,269. The revised outlook follows management commentary highlighting an intensified focus on physical store expansion, particularly across North India. Avenue Supermarts is now targeting a 10–15% annual increase in its store network as part of its long-term growth strategy. Nuvama also noted a shift in its valuation methodology to a sum-of-the-parts (SOTP) approach, now assigning separate valuations to core DMart operations and the digital segment, DMart Ready. The revision in estimates under this new framework led to the higher target price. Despite a compelling growth narrative, Nuvama has chosen to maintain a cautious stance given the current valuation levels. Disclaimer: The views expressed in this article are based on brokerage reports and do not constitute investment advice. Please consult your financial advisor before making any investment decisions. Ahmedabad Plane Crash News desk at
Business Upturn
6 hours ago
- Business
- Business Upturn
FII flows will be hurt as US announces 25% tariffs on Indian goods; volatility expected to rise: Experts
Foreign institutional investor (FII) flows into Indian equities are likely to come under pressure following the United States' unexpected move to impose 25% tariffs on Indian goods, according to a note by Nuvama. The development, which comes amid already fragile global macros, may significantly impact market sentiment and capital flows in the coming weeks. US tariffs on India higher than expected US President Donald Trump has announced that the country will impose a 25% tariff on Indian goods starting August 1, mirroring the policy signaled earlier on April 2, dubbed 'Liberation Day'. The rate is notably higher than the overall average US import tariff of 18%, and is only below that of China (55%) and Bangladesh (35%) among major emerging markets. India's goods exports to the US, which stand at around $87 billion (roughly 20% of India's total exports and 2.5% of GDP), are likely to be impacted. Key export sectors such as textiles, pharmaceuticals, electronics, agriculture, and machinery are particularly vulnerable. Export hit may be manageable—but the bigger story is global Nuvama's analysis suggests that while the direct hit to exports could be partially cushioned by redirecting shipments to other countries and through benefits from the recent INR depreciation, the bigger threat lies in the indirect global impact of the US move. 'The tariff-led narrowing of the US trade deficit, amid a weaker dollar and elevated interest rates, could impart a deflationary impulse globally, weighing on trade, earnings, and growth—including in India,' the brokerage said. This could lead to reduced FII interest in India, especially given lacklustre domestic demand and uncertainty in policy response. Nuvama suggests that further monetary easing by the RBI may be warranted to mitigate the blow to external trade. FII flows at risk; market volatility ahead The note warns that capital flows into India are now extremely sensitive, particularly in a market where promoter selling is rising and DII flows are slowing. The sectors most directly exposed to the US in terms of pricing include pharma, auto ancillaries, select industrials, cables & wires, and ceramics. However, the broader risk is indirect—with concerns that FII outflows could hurt small and midcap stocks, and high-beta domestic cyclicals like NBFCs, real estate, and capital goods. One potential winner from the situation could be the IT sector, which may benefit from INR depreciation and currently attractive relative valuations. Conclusion: Cautious outlook warranted While the actual export impact of the tariffs might be limited in GDP terms, the spillover effects on FII flows and global demand could be significant. With uncertainty elevated and no clear timeline for trade negotiations, markets are likely to remain volatile, and foreign inflows may soften further in the short term. Nuvama retains a cautious stance on Indian equities, citing both macroeconomic headwinds and sector-specific risks. Ahmedabad Plane Crash
