Britannia Q3 Results Preview: Net profit may drop 1% YoY, revenue growth likely to be muted amid weak volumes

Slowdown in the rural market and increased competitive intensity from regional brands are likely to hurt volume growth for Britannia Industries. The company is expected to report a moderate topline growth of around 1% – 2% year-on-year (YoY) in Q3FY24, as per average brokerage estimates.

Net profit of the company in the quarter ended December 2024 is likely to drop by 1% YoY to ₹550 crore.

Britannia Industries’ Earnings before interest, taxes, depreciation and amortization (EBITDA) in Q3FY24 is estimated to rise 1% YoY to ₹830 crore, while EBITDA margin is expected to remain flat at 19.5% despite gross margin expansion on account of higher higher ad-spends.

Also Read: Q3 results today: Godrej Properties, Britannia, Reliance Capital, Tata Teleservices, and 158 more to post earnings

Here’s what brokerages expect from Britannia Q3 results today:

Axis Securities

Axis Securities expects Britannia Industries to report 1-2% YoY revenue growth at ₹4,259 crore (1 digit volume growth) on back of anniversarization of price hikes and increase in competitive intensity. EBITDA margin is likely to remain flat at 19.5%.

Rural demand environment, raw material cost outlook, market share trends, update on core biscuits portfolio and adjacencies would be key monitorables.

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Prabhudas Lilladher

Prabhudas Lilladher expects Britannia’s volume growth of 5%, however competition from unorganised players will keep volume under check. Premium segment is expected to perform better than the mass segment. It expects gross margin and EBITDAM to contract by 115 bps and 48 bps YoY as the base quarter had one time PLI gains. Adjusted PAT is expected to increase by 5.2% YoY at ₹584.2 crore, while revenue may grow 8% YoY to ₹4,532.5 crore.

The brokerage expects 3% volume growth in the base business in Q3FY24. The upward surge seen in raw material prices in anticipation of low supply. It expects gross margin and EBITDA margin decline of 70 bps and 20 bps YoY on a high base.

As per Motilal Oswal’s estimates, Britannia’s Q3 net profit is expected to rise 2.6% YoY to ₹569.9 crore, while revenue is likely to grow 4.6% YoY to ₹4,389.9 crore in Q3FY24.

Also Read: FMCG ad dollars seen rising in Q4

Equirus Securities

Britannia Industries would witness another quarter of soft topline growth as it laps a high base (+17% YoY growth in 3QFY23), price cuts/grammage increases and pricing anniverserization. New launches and distribution expansion would support the growth. GM would be steady QoQ. EBITDAM to compress 100 bps YoY on a high 3QFY23 base, Equirus Securities said.

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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 taking any investment decisions.

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Published: 06 Feb 2024, 09:34 AM IST