YES Securities expects 5.5% underlying revenue growth led by around 4% volume growth, while Motilal Oswal sees slightly stronger organic growth of about 7%, primarily volume-driven. However, reported growth is likely to appear more muted at around 3-4% due to the impact of the ice cream business carve-out, which has altered the base and headline comparisons.
Across segments, growth is expected to remain broad-based but not aggressive. Motilal Oswal estimates around 5% growth each in home care and personal care, while the beauty and wellbeing segment is likely to outperform with double-digit expansion. Foods and beverages are expected to grow in mid-single digits, reflecting stable demand conditions.
Margins, however, remain the key variable this quarter. Gross margins are expected to stay around the 51%–51.5% range, broadly stable year-on-year after benefiting from prior cost tailwinds. EBITDA margins are likely to hover near 23%, within the company’s guided range.
That said, there is a divergence between reported and underlying margin trends. Motilal Oswal points out that reported EBITDA margins may expand by 50 basis points YoY due to the exit of the low-margin ice cream business. On a like-for-like basis, margins may actually contract slightly, indicating underlying cost pressures.
Nuvama also highlights this nuance, estimating EBITDA growth of around 10% YoY on a like-for-like basis, with margin expansion of over 100 basis points. However, sequentially, margins are expected to decline due to higher input costs and operating leverage normalization.
Profit growth is expected to remain modest. YES Securities estimates EBITDA growth of about 3.4% YoY, while adjusted profit after tax may decline marginally, reflecting higher costs and limited pricing power.The quarter is expected to underline a gradual recovery in demand rather than a sharp acceleration. Volume growth has improved compared to previous quarters, but pricing contribution remains moderate, suggesting that consumption recovery is still uneven.
Investors will closely track management commentary on rural demand trends, which have shown early signs of recovery but remain fragile. Urban demand is expected to remain steady, but not significantly stronger. Another key monitorable will be input cost trends and the company’s pricing strategy. With commodity prices showing volatility, the ability to sustain margins without aggressive price hikes will be critical.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)