1 / 5Hindustan Unilever: For the brokerage, Hindustan Unilever continues to be the best pick among the large-cap companies. Revenue of the company is expected to grow by 7 percent YoY to Rs 9,880 crore, with underlying domestic volume growth of 6 percent in Q2FY20, MOFSL said. Gross margins are likely to be up 140 bps YoY to 53.4 percent. The operating margin expansion to 23.4 percent in the quarter, will lead to an EBITDA growth of 14.4 percent YoY, it noted. Adjusted PAT is likely to grow 6.1 percent YoY to Rs 1,610 crore due to very high other income bases in Q2FY19, the brokerage said.
2 / 5Britannia Industries: Post corporate tax cuts and consequent likely passing on of benefits, MOFSL has elevated Britannia Industries to its list of preferred picks. The FMCG major is expected to see a sales growth of 8 percent YoY to Rs 3,090 crore, with base business volumes growing 4 percent on a high base of 11 percent volume growth, it said. The gross margin is expected remain flat YoY at 40 percent, while the operating margin is seen contracting by 20 bps YoY to 15.6 percent.
3 / 5Colgate: Post corporate tax cuts and consequent likely passing on of benefits, MOFSL has elevated Colgate to its list of preferred picks. The company's sales are expected to grow 8 percent YoY to Rs 1,260 crore, with 6 percent toothpaste volume growth, while the gross margins are expected to contract 90 bps YoY to 63.9 percent, the brokerage said. However, MOFSL expects the EBITDA to decline by 3.4 percent YoY to Rs 320 crore on higher ad spends. Adjusted PAT is likely to decline 3.4 percent for the quarter to Rs 190 crore, it noted.
4 / 5Marico: Continuing to be positive on the prospects for Marico, MOFSL expects its sales to grow 8.9 percent YoY to around Rs 1,990 crore with 6.4 percent growth in domestic volumes. It added that Marico is likely to report strong gross margin and EBITDA margin growth in Q2FY20. The gross margin is seen expanding by 300 bps YoY to 47 percent, while the EBITDA is expected to grow at 20.4 percent YoY, with margin expansion of 170 bps YoY to 17.7 percent in the quarter. Adjusted PAT is projected to grow 17.1 percent YoY to around Rs 250 crore, it noted.
5 / 5United Spirits: United Spirits is expected to post a revenue growth of 6.6 percent at Rs 2,370 billion, with 2.6 percent growth in overall volumes. Gross margins are expected to contract 250 bps YoY to 47.7 percent. The EBITDA margin is seen contracting by 400 bps YoY to 15.9 percent and EBITDA to decline 14.8 percent YoY to Rs 380 core as Q2FY19 EBITDA margins were at unusually high levels, the brokerage said. The adjusted PAT is estimated at around Rs 200 crore in Q2FY20, down 21.1 percent YoY.
