Latest news with #NuvamaInstitutionalEquities
Mint
a day 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
a day ago
- Business
- Mint
Sensex crashes 800 points, Nifty drops below 24,650; why is Indian stock market falling? Explained with 5 key factors
Stock market crash: The Indian stock market suffered significant losses across segments in the morning session on Thursday, July 31, with the benchmark Sensex crashing nearly 800 points and the Nifty 50 plunging below 24,650. A massive selloff engulfed the domestic stock market a day after US President Donald Trump slapped a 25 per cent tariff on most Indian imports to the US. The Sensex opened at 80,695.50 against its previous close of 81,481.86 and plunged nearly 800 points, or 1 per cent, to an intraday low of 80,695.15. The NSE counterpart Nifty 50, after opening at 24,642.25 against its previous close of 24,855.05, crashed almost 1 per cent to an intraday low of 24,635.00. The selloff was more intense in the mid and small-cap segments as the BSE Midcap and Smallcap indices plunged up to 2 per cent. Investors lost over ₹ 3 lakh crore within the first 10 minutes from the opening bell as the overall market capitalisation of BSE-listed firms dropped to nearly ₹ 449 lakh crore from more than ₹ 452 lakh crore in the previous session. Track all live updates of the Indian stock market here Experts highlighted the following five key factors behind the stock market selloff: US President Donald Trump imposed a 25 per cent tariff and a penalty on India for buying Russian oil, effective August 1. Experts believe a 25 per cent tariff on Indian imports to the US may weigh on the Indian stock market sentiment. If tariffs stay at this level for a longer period, it will impact the country's GDP growth and weaken its currency, further impacting foreign capital inflow. "The higher tariffs on India versus expectations could potentially weigh on capital flows. FII flows have now become critical in shaping market outcomes amid heavy promoter selling and slowing DII flows. The direct impact is likely to be on stocks/sectors where the US sets the marginal price –pharma, auto ancillaries, a few industrials, cables and wires, tiles, etc.," said Nuvama Institutional Equities. "However, the indirect impact of capital flight is likely to be more dominant and could weigh on SMIDs and high-beta domestic cyclicals (real estate, NBFCs and industrials). On the other hand, an INR depreciation could help IT, and it could potentially outperform given the now low relative valuations. Overall, maintain a cautious stance on markets," the brokerage firm added. Another key factor that added to the pessimism in the market is the lack of hints from the US Fed on rate cuts starting coming months. While the US Federal Reserve maintained the federal funds rate in the range of 4.25 per cent to 4.50 per cent on expected lines, the central bank did not give any clear signal that rate cuts may begin any time soon. Some experts believe rate cuts may begin after one or two quarters. "It may take more than one or two quarters—possibly even longer—before the Fed begins easing. Over the past two months, tariffs have been on the rise, and their impact is expected to come with a lag. The September–October period will be crucial to observe how these tariffs affect US inflation," said G Chokkalingam, the founder and head of research at Equinomics Research Private Limited. Market participants appear concerned that elevated interest rates for a longer period may keep the US dollar and bond yields up, which can affect the foreign capital inflow in emerging markets like India. Massive foreign capital outflows have been one of the main reasons behind the Indian stock market's recent downtrend. Foreign portfolio investors (FPIs) have sold Indian equities worth over ₹ 42,000 crore in the cash segment in July so far (till July 30). FPIs have been selling Indian stocks as the market valuation is stretched, the rupee has weakened, and earnings have remained soft. (This is a developing story. Please check back for fresh updates.) Read all market-related news here Read more stories by Nishant Kumar Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.
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Business Standard
2 days ago
- Business
- Business Standard
Trump's tariffs threaten to deepen India's $248 bn stock market rout
India's faltering equities market faces the risk of more losses after the nation was slapped with one of the highest tariff rates in Asia on its exports to the US. President Donald Trump said he would impose a 25 per cent levy on Indian goods starting Friday and threatened an additional penalty over the country's energy purchases from Russia. That's a steeper hit than the 15 per cent to 20 per cent range applied on several regional peers. India's stock benchmark has lagged most major global peers this year amid concerns over a slowdown in its economy and corporate earnings. The underperformance has deepened this month as foreign investors have accelerated their withdrawals, turning attention to cheaper or more attractive markets like Hong Kong and South Korea. The value of India's stock market is down $248 billion since reaching a record on July 2. 'India is known to be a tough negotiator when it comes to trade, and this time the toughness seems to have effected an undesirable outcome,' said Tomo Kinoshita, global market strategist at Invesco Asset Management. 'The 25 per cent tariff should have a moderate negative impact on India's stock market, especially for export sector stocks.' The MSCI India Index is on track for its weakest month since February. While it has eked out a gain this year, its performance trails the almost 14 per cent jump in MSCI Asia Pacific Index and pales in comparison to the 36 per cent surge in the MSCI Korea Index, which has rallied on optimism surrounding bold reforms under a new president. Futures contracts on the local benchmark NSE Nifty 50 Index dropped 0.6 per cent after Trump's announcement while the iShares MSCI India ETF slid 1.5 per cent. The situation remains fluid, as the US president later said negotiations with India continue and whether or not a trade deal can be reached will be known 'at this end of this week.' India's once-lauded relative insulation from global turmoil is losing its shine. With earnings offering few positive surprises and valuations remaining among the highest in the region, investors are likely to stay cautious in the near term. The MSCI India trades at almost 22 times its one-year forward earnings, well above its long-term average and gauges of Chinese and Korean shares. Even as stocks decline, India's equity capital market is humming. Fundraising from initial public offerings, share placements to large investors and block trades has topped $6 billion for a third straight month. That level of issuance — last seen in late 2024 — coincided with a double-digit correction in local shares. 'High valuations and slowing profits are inverting buyer-seller incentives,' said Prateek Parekh, a strategist with Nuvama Institutional Equities. Business founders and private equity investors are on a 'selling spree,' while domestic flows are slowing. 'Foreign fund flows are now critical.' That boost will be key, as foreign investors — who have withdrawn more than $2 billion from local shares this month — weigh whether earnings can justify the rich valuations. The April-June results season so far has done little to ease concerns. Earnings from key technology and financial firms, the two sectors that together make up about 40 per cent of the market's value, have largely underwhelmed. Yet some believe the tide could still turn. Interest-rate cuts and a pick-up in economic growth could end the 'flat-to-weak' positioning of local stocks and lay the foundation for an earnings rebound in the second half of the year through March, according to Emkay Global Financial Services' strategist Seshadri Sen. Rahul Chadha, founder and chief investment officer at New York-based Shikhara Investment Management LP. Chadha, said his fund has raised exposure to Korean stocks in recent months due to benefits including improved corporate governance. 'Honestly, 2025 looks challenging for India to close the performance gap,' he added.
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Business Standard
2 days ago
- Business
- Business Standard
Mid, smallcap indices can dip up to 9% from here; analysts turn cautious
Historically, the combination of narrowing earnings differential, high valuations and prolonged outperformance, Nuvama said, has led to a large period of underperformance for SMIDs (2018-19) Listen to This Article The rally in the small-and midcap indices (SMIDs) is showing signs of fatigue amid a sharp rebound from April lows in the backdrop of tepid earnings growth and high valuations, suggest analysts. These indices, technical charts hint, may drop up to 9 per cent from the current levels. Nifty/SMIDs have bounced 12 per cent / 20 per cent from April low amid earnings downgrades and continuing economic slowdown. This, said analysts at Nuvama Institutional Equities, has led to an unprecedented wedge between growth and valuation—with the BSE 500 median PE at 40x, while trailing median earnings growth is just 9
Economic Times
24-07-2025
- Business
- Economic Times
Housing market shows signs of recovery as sales volumes rise after year-long slump
India's residential property market shows signs of recovery with a 1% YoY sales volume increase in June 2025, ending a year-long decline. Sales value surged 23% driven by larger deals and improved confidence. Delhi-NCR leads the rebound, while western markets face contraction. New launches are up in select cities, but overall volumes remain challenged. Tired of too many ads? Remove Ads Uneven demand recovery across cities Tired of too many ads? Remove Ads Supply side shows strength in select markets Prices climb, inventory stays comfortable Outlook: Opportunities for organised players, affordability a concern Tired of too many ads? Remove Ads After a prolonged slump in housing sales volumes, green shoots of recovery are becoming visible. According to a recent report by Nuvama Institutional Equities , residential sales volumes in India rose 1% year-on-year in June 2025, breaking a 12-month streak of annual marginal, albeit modest, increase is significant as it is aided by a low base and may mark the beginning of a turnaround in market volume growth remains tepid, sales by value surged 23% YoY in June, supported by higher ticket-size deals and improved buyer quarter (Q2CY25) witnessed a 9% YoY rise in sales value, while H1CY25 posted a 5% YoY increase, reflecting gradual momentum despite macro recovery, however, is not broad-based. Delhi-NCR led the demand rebound with a sharp 66% YoY increase in H1CY25, followed by Chennai with a 26% contrast, key western markets like the Mumbai Metropolitan Region (MMR) and Pune saw demand contraction of 12–14%, while Hyderabad slipped 20% YoY. Bengaluru and Kolkata showed moderate by value were up 5% YoY in June, supported by a 153–156% YoY spike in supply in NCR and Bengaluru, according to Nuvama 's launch volumes continued to face challenges, dropping 4% YoY in June and 1% in Q2CY25. Western cities and Kolkata remained weak spots, with new launches falling 19–29% demand disparities, inventory levels remain steady at 18 months pan-India, in line with May 2025 figures. Markets like Pune and NCR continue to be the healthiest, with inventory levels of just 11–13 price appreciation has been robust across cities—up to 26% YoY in NCR and 16–17% in Kolkata and Chennai—largely led by luxury and premium housing report highlights that RERA-driven consolidation is favouring organised developers with stronger pipelines and financial the RBI's recent rate cuts and improving launch activity, leading players like Prestige Estates and Brigade Enterprises (both rated 'BUY') are expected to benefit from the ongoing shift in market a deterioration in housing affordability—driven by rising prices and stagnant incomes—remains a looming to Nuvama, while real estate stocks continue to trade at reasonable valuations, sustained cash flow growth and disciplined expansion will be key to delivering medium-term returns.: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)
