Sharekhan Broker Research reports

HUL’s Q2FY2025 performance was slight miss on expectations with revenues growing by 1.5% y-o-y while PAT declined by ~4% y-o-y; underlying volumes grew by 3%, lagging street expectations of 4-5%.

Reported APAT at Rs 663 crore (up 23.5% y-o-y) as against the estimate of Rs 655 crore on 70 bps y-o-y expansion in EBITDA margin to 11.7%.

In Q2FY2025, revenue reached Rs. 3,424 crore, up 8% y-o-y, but down 1% q-o-q. Operating profit stood at Rs. 538 crore, reflecting a 14% y-o-y decrease and an 11% q-o-q decline.

Q2 numbers were strong with a profit of Rs. 21 crore (versus a loss in the same quarter last year), superseding our estimates of Rs. 9 crore. Revenues rose 82% y-o-y (above our estimates of 37%) led by Consumer Durables (94% growth y-o-y) and Electronics (95% y-o-y) segments.

We maintain a Buy on Kajaria Ceramics with a revised PT of Rs. 1,600, factoring downwardly revised estimates and considering a healthy earnings growth trajectory in the next three years.

For Q2FY2025, NLSL revenue stood at Rs. 397 crore, down 2% q-o-q/up 4% y-o-y in CC, missing our estimate of Rs. 417 crore.

Gabriel reported PAT at Rs. 52.7 crore (+12.2% y-o-y) against our estimate of Rs. 54 crore on 3% beat in revenue estimates and 50 bps y-o-y expansion in gross margin.

We retain BUY on Mahindra Logistics Limited (MLL) with a revised PT of Rs. 560, factoring in downwardly revised estimates, while it remains on a growth path.

Though credit cost rose sharply, AU SFB reported a sharp earnings beat led by strong fee income/ treasury gains and lower opex. The bank managed to report RoA/RoE at 1.7%/ 14.5% in Q2FY25.

Overall operating performance was in line however higher credit (2.1% versus 1.9% q-o-q) was a key dampener resulting in muted earnings growth.