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Informist, Monday, Oct. 27, 2025

 

By Avishek Rakshit

 

KOLKATA – Britannia Industries Ltd.'s continued aggression on raising volumes to increase market share despite price increases is expected to help the company report healthy financial growth in the September quarter.

 

In the September quarter, consumers had deferred purchases, especially of large pack sizes, in anticipation of the cut in the goods and services tax. Retailers prioritised clearing their existing stock on which higher GST had been paid. Britannia faced some confusion related to billing and tax rates on sales by the distributors to retailers. This resulted in lower uptake by distributors. However, the company was able to sail though the uncertainty and register volume growth during the September quarter. Around 85% of Britannia's portfolio will benefit from the tax rate cuts.

 

The September quarter top line of Britannia, which is one of the two largest bakery companies in the country, is expected to rise nearly 6% on year to INR 49.5 billion, according to the average of estimates from 12 brokerages. On a sequential basis, the company's revenue is expected to increase 7%. The highest estimate for revenue is INR 51 billion by Elara Securities (India) Pvt. Ltd. and the lowest is a little over INR 48 billion by Nirmal Bang Equities Pvt. Ltd.

 

Britannia's bottom line for the September quarter is expected to rise over 11% on year and 13% on quarter to nearly INR 6 billion. The highest estimate for net profit is INR 6 billion from YES Securities (India) Ltd. and the lowest is INR 5.7 billion from Emkay Global Financial Services Ltd. The company is yet to declare when it will detail its September quarter earnings.

 

Britannia's top line growth is expected to be driven largely by price increases which were mostly implemented during the last three trailing quarter. Brokerages differ widely on their projections of Britannia's sales volume. JM Financial Institutional Securities Pvt. Ltd. forecasts 2% volume growth, which along with 6% price hike, is expected to lead to 7% on-year revenue growth.

 

Nuvama Wealth Management Ltd. said Britannia's sales volume is likely to increase 1% on year due to grammage addition after GST was cut on packs retailing at INR 5, INR 10, and INR 20, which account for 63% of its sales.

 

Kotak Securities Ltd. said that while Britannia is expected to be a major beneficiary of the GST cut, the company's domestic sales are expected to have been hit by 400 basis points in the September quarter on account of trade destocking. Kotak Securities expects Britannia's biscuits sales volume to have fallen 1% on year due to the grammage cuts and trade destocking.

 

Britannia's earnings before interest, tax, depreciation, and amortisation are expected at 8.5 billion for the September quarter, according to the average of estimates of 11 brokerages. The EBITDA estimates range between INR 8.7 billion by Motilal Oswal Financial Services Ltd. and INR 8 billion by Emkay.

 

Nuvama expects Britannia's gross margins to fall 113 basis points on year due to higher palm oil costs. Kotak Securities expects the company's gross margin to decline 45 basis points.

 

At 1429 IST, shares of Britannia traded at INR 5,900 on the National Stock Exchange, down 2.3%. The shares are up over 9% since the company announced its June quarter earnings in August.

 

Of the 20 research reports on the company available with Informist, 13 have a 'buy' rating on the stock at an average target price of INR 5,873. Five brokerages have a 'hold' rating on the stock at an average target price of INR 5,878 and two brokerages have a 'sell' rating on the scrip.

 

Following are the Jul-Sept earnings estimates for Britannia Industries from 12 brokerages in descending order of the estimate of net profit in INR million:

 

Brokerage	Net sales (in INR million)	Net profit (in INR million)	EBITDA (in INR million)
YES Securities (India) Ltd	49,853	6,117	8,724
Motilal Oswal Financial Services Ltd	49,315	6,107	8,738
Sharekhan Ltd	50,050	6,100
Systematix Shares and Stocks (India) Ltd	49,325	6,072	8,612
Kotak Securities Ltd	49,570	5,953	8,573
Nuvama Wealth Management Ltd	48,974	5,876	8,460
Nirmal Bang Equities Pvt Ltd	48,309	5,851	8,358
Prabhudas Lilladher Pvt Ltd	50,409	5,816	8,317
Nomura Equity Research	49,250	5,792	8,415
Elara Securities (India) Pvt Ltd	50,643	5,739	8,250
JM Financial Institutional Securities Pvt Ltd	48,961	5,715	8,310
Emkay Global Financial Services Ltd	48,795	5,709	8,183
Average	49,455	5,904	8,449

 

End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Avishek Dutta

 

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