Earnings Outlook
Britannia consol PAT seen down despite growth in volume
This story was originally published at 14:24 IST on 4 February 2025
Register to read our real-time news.Informist, Tuesday, Feb. 4, 2025
By Avishek Rakshit
KOLKATA – Bakery products major Britannia Industries Ltd. may gain market share and report price and volume-led growth, but this may not necessarily reflect in the company's bottom line. Britannia is expected to report a little over 7% year-on-year decline in its consolidated net profit for the December quarter to INR 5.2 billion, while consolidated revenue could increase by 5.4% on year to INR 44.9 billion, according to the average of estimates from 16 brokerages.
Sequentially, too, Britannia's financial performance could disappoint despite Oct-Dec being a quarter that sees a pent-up festival demand. The company's net profit may fall by 2.7% on quarter, and revenue could fall 3.9%.
Britannia had reported a net profit of INR 5.6 billion in Oct-Dec of 2023-24 (Apr-Mar), and INR 5.3 billion in Jul-Sept. The revenue was INR 42.6 billion in the December quarter of FY24, and INR 46.7 billion in Jul-Sept.
Britannia will declare its Oct-Dec financial results on Thursday.
Amongst the brokerage firms, KR Choksey Research has the highest profit estimate at INR 5.6 billion, and Elara Securities (India) Pvt. Ltd. the lowest at INR 3.7 billion. In terms of revenue, YES Securities (India) Ltd. has pegged Britannia's revenue the highest at INR 46.2 billion, and JM Financial Institutional Securities Pvt. Ltd. pegged it the lowest at a little over INR 44 billion.
Brokerage Axis Securities Ltd. said Britannia is expected to report a 5% on year volume growth as compared to 7% in Apr-Jun, and 8% in Jul-Sept. The volume growth is likely to be affected by the price hikes the company took in the past and anniversarisation of price cuts which were taken last year.
Centrum Broking Ltd., which did a trade channel check, said Britannia has gained market share from its main competitor, Parle, and its new products have been well-received by consumers. This brokerage, however, in line with JM Financial, has pegged the volume growth lower at 4%. The latter reasoned that grammage cuts would also have contributed towards lower volume growth.
Britannia is expected to report an earnings before interest, tax, depreciation and amortisation of INR 7.7 billion, according to the average of estimates from 15 brokerages. The highest EBITDA of INR 8.5 billion has been projected by KR Choksey Research, and the lowest at INR 7.3 billion by Nirmal Bang Equities Pvt. Ltd.
Nuvama Wealth Management Ltd. said the company's gross margins will decline by 201 basis points to 41%, and the EBITDA margin could fall by 228 basis points to 17%. Centrum Broking estimates that higher raw material costs could lead to the EBITDA margin declining by 226 basis points.
At the current price, the stock is down nearly 12?ter the company announced its September quarter earnings on Nov. 11. Although the company declared its earnings after trading hours, the stock closed 6.3% lower at INR 5,434.7. The following day, the share opened lower at INR 5,420, and closed at INR 5,027.6, down 7.2%, after hitting a low of INR 5,005.0. At 1415 IST, shares of Britannia traded 1.9% down at INR 5,010 on the National Stock Exchange.
Following are the Oct-Dec earnings estimates for Britannia based on reports from 16 brokerage firms in the descending order by the estimate of net profit:
|
Broker Name |
Net Sales (in million rupees) |
Net Profit (in million rupees) |
EBITDA (in million rupees) |
|
KR Choksey Research |
44,983.00 |
5,645.00 |
8,471.00 |
|
Motilal Oswal Financial Services Ltd |
45,543.00 |
5,588.00 |
8,061.00 |
|
YES Securities (India) Ltd |
46,225.00 |
5,446.00 |
7,951.00 |
|
Nomura Equity Research |
44,803.00 |
5,398.00 |
7,895.00 |
|
Systematix Shares and Stocks (India) Ltd |
45,243.00 |
5,352.00 |
7,850.00 |
|
Sharekhan Ltd |
44,990.00 |
5,280.00 |
|
|
Axis Securities Ltd |
44,920.00 |
5,260.00 |
7,780.00 |
|
HDFC Securities Ltd |
44,853.00 |
5,239.00 |
7,844.00 |
|
Nuvama Wealth Management Ltd |
44,664.00 |
5,229.00 |
7,604.00 |
|
Centrum Broking Ltd |
44,958.00 |
5,216.00 |
7,656.00 |
|
JM Financial Institutional Securities Pvt Ltd |
44,046.00 |
5,161.00 |
7,598.00 |
|
Kotak Institutional Equities |
44,774.00 |
5,151.00 |
7,634.00 |
|
Emkay Global Financial Services Ltd |
44,495.00 |
5,141.00 |
7,542.00 |
|
Nirmal Bang Equities Pvt Ltd |
44,862.00 |
4,986.00 |
7,268.00 |
|
Prabhudas Lilladher Pvt Ltd |
44,650.00 |
4,967.00 |
7,278.00 |
|
Elara Securities (India) Pvt Ltd |
44,064.00 |
3,723.00 |
7,455.00 |
|
Average |
44,879.56 |
5,173.88 |
7,725.80 |
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Vandana Hingorani
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